Spanish infrastructure services company Ferrovial – parent company of waste management firm AmeyCespa and owner of Heathrow airport – has acquired UK utilities firm Enterprise in a £385 million deal.
Enterprise, a business services group, is comprised of 9,600 employees and provides environmental, property and utilities services as well as maintenance for local authorities and regulated sector clients.
It took in £1.1 billion in revenues in 2012, excluding its highway maintenance joint venture EnterpriseMouchel, which will now be wholly run by Mouchel.
According to Ferrovial, if approved by the European Commission, the acquisition will result in the doubling of Ferrovial’s presence in the UK and will see Enterprise merge with Amey in early April.
Once combined, the new organisation will employ 21,000 employees and have an annual turnover of £2.3 billion.
It is not yet known if Enterprise’s existing UK contracts, such as its food waste service in Peterborough, will be assumed by Amey.
‘Pivotal for the UK marketplace’
Íñigo Meirás, CEO of Ferrovial, said the purchase of the firm will “strengthen the operations currently conducted via Amey” and fulfil the company’s “strategic objective of profitable growth through selective acquisitions”.
"The acquisition of Enterprise will create value through synergies derived from integrating it into Amey. The deal strengthens our position in markets with growth potential. In terms of client types, range of services and geographical footprint, the two companies are highly complementary and offer great potential to share resources”, he added.
Ferrovial Services has announced that it will appoint Mel Ewell, current CEO of Amey, as CEO of the new combined company once the transaction is completed.
Commenting on the deal, Elwell said: “The acquisition will be pivotal for the UK marketplace, creating a business with the breadth and depth of service to respond to today’s market dynamics. Public and regulated clients are seeking radical reform in the shape of more efficient service, which don’t comprise on quality or the service to the public.
“Our leading asset management and consulting capability, paired with Enterprise’s additional range of services, will ensure that the company can deliver a truly transformational service.”
The sale eliminates a problematic investment for the London based private equity group and investors of Enterprise, 3i, which was forced to write off its entire £200 million equity stake in the company in 2011 after it became unable to cope with its debts following the financial crisis.
A spokesperson for 3i said the impact of the sale on its net asset value would be “marginal” because it decided to take the write down two years ago.
Analysts at BPI, the Portuguese bank, added that the deal “comes on the cheap side.”
Read more about Ferrovial Services and Enterprise.
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