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News & Media > Financial

21:01:2011

May Gurney acquires Turriff, a multi-utility provider

May Gurney is pleased to announce that it has acquired Turriff Group Limited (Turriff), one of Scotland's largest utility infrastructure maintenance companies, for a cash consideration of up to £13.6 million.

Under the terms of the transaction May Gurney will pay an initial cash consideration of up to £8.6m, with a further £5m payable over three years dependent upon a number of key performance indicators being met, including future revenue targets and key employee retention. In addition, May Gurney is assuming approximately £9.4m of debt.

This acquisition delivers key benefits to May Gurney:

· Further strengthens its position in the utilities maintenance market and gains entry to the £2.4bn support services market in Scotland, with opportunities in local government and rail.

· May Gurney gains access to the UK's regulated £1.7bn gas marketplace which is displaying strong and sustained growth with dependable, long-term income streams.

· Turriff's acquired order book is approximately £90m, with available extensions worth up to an additional £70m. Its key long-term clients include Scotia Gas, Scottish Water and Scottish & Southern Energy.

· The transaction is expected to be earnings accretive in the first full year of acquisition.

· Potential to achieve cost synergies of circa £0.3m per annum.

· The transaction further underpins May Gurney's existing £1.4bn forward order book and long term earnings visibility.

Headquartered in Aberdeen, Turriff has more than 550 employees and is one of Scotland's largest utility infrastructure maintenance companies with market-leading positions in gas, water, electricity and multi-utility services.

For the year to 31 December 2010, based on unaudited management accounts, Turriff had earnings before interest, tax, depreciation and amortisation of £2.5m on revenues of £41m. At completion, Turriff had a balance sheet showing total assets of approximately £18m.

Under the terms of the deal, key members of Turriff's senior management team have been incentivised to remain with the business.

Philip Fellowes-Prynne, May Gurney chief executive, said: "We are delighted to welcome Turriff to the May Gurney group, whose focus on developing long-term client relationships and reputation for assured operational delivery is so aligned to our own.

"This transaction meets with our strategy of developing wider services with existing clients and increasing our geographical spread.

"Turriff will provide access to the power and gas maintenance sectors, the Scottish support services market and consolidates our position in water. These are all key growth markets with dependable, sustainable income streams which will provide us with significant opportunities to develop long-term relationships with new clients."


About Turiff
Turriff has been providing utility maintenance services since 1987 and now has a workforce of more than 550 utility operatives and support staff.

The company has built up a comprehensive portfolio of maintenance services and is active in the gas, water, electricity, and metering markets. More recently, after significant investment in training, plant and accreditations, Turriff has entered the multi-utility market.

In parallel with the growth in the range of services it offers, Turriff has increased its geographic coverage, and broadened its client base. Key operations centres have been established in Aberdeen, Dundee and Falkirk.

For more information about Turriff visit: www.turriff.com