Under the terms of the deal May Gurney will pay an initial cash consideration of up to 拢8.6m, with a further 拢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 拢9.4m of debt.
May Gurney said that the addition of Turriff further strengthens its position in the utilities maintenance market and gets it into the 拢2.4bn support services market in Scotland, with opportunities in local government and rail.
聽It also brings May Gurney into the UK's regulated 拢1.7bn gas market.
Turriff's acquired order book is approximately 拢90m, with available extensions worth up to an additional 拢70m. Major long-term clients include Scotia Gas, Scottish Water and Scottish & Southern Energy.
May Gurney expects the transaction to be earnings accretive in the first full year of acquisition and bring potential cost synergies in the region of 拢300,000 ayear.
Aberdeen-based Turriff has more than 550 employees. For the year to 31 December 2010, it had earnings before interest, tax, depreciation and amortisation of 拢2.5m on revenues of 拢41m. At completion, Turriff had a balance sheet showing total assets of approximately 拢18m.
Under the terms of the deal, key members of Turriff's senior management team have been incentivised to remain with the business.
May Gurney chief executive Philip Fellowes-Prynne said:聽"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.
鈥淭his 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."
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