Business Weekly - Cambridge, UK

HOME

Anglian Water offloads subsidiary

Written by Tony Quested

Wednesday, 12 March 2008

Morrison Utility Services has been sold for £135m by AWG The Anglian Water Group in Huntingdon is continuing its strategic commitment to a focus on what it considers its core business, water services, with the £135 million sale of its Morrison Utility Services subsidiary to European private equity firms, Cognetas and Englefield Capital. AWG believes the sale is further validation of recent decisions to turn down bids for the entire Morrison operations – which it said undervalued the businesses – and instead improved their performance and reached what AWG considered a more accurate and profitable valuation further down the line. Cogentas and Englefield meanwhile say they will now be investing alongside the management team to take the Morrison US business forwards. Jonson Cox, group CEO of the Anglian Water Group, said: “When we first took the decision to retain the Morrison business within AWG our primary goal was to focus the business on repair and maintenance activities; this generated significant shareholder value. “Morrison’s two divisions, Utility Services and Facilities Services, are successful support services businesses, with excellent management teams, that focus on delivering growth and service excellence. In the current market conditions the successful sale is a reflection of the quality of the business and its people. Morrison Facilities Services remains a standalone division that continues to perform well and has shown strong growth.” Morrison US’s offerings are centred on the provision, replacement, repair and maintenance of utility infrastructure and is one of the UK and Ireland’s leading support service providers within the electricity, gas, telecommunication and water sectors. Between the years ended March 2004 and March 2007, Utility Services increased its turnover from around £250m to nearly £500m, while operating profit also doubled in the same period. The company is headquartered in Stevenage and employs over 3,300 people nationwide, around one third of AWG’s entire workforce. Its turnover for the year ended March 2008 was approximately £500m, its contracted order book in excess of £1.4bn. Operating under long-term contracts, it is a key provider of outsourced services to a broad range of blue chip utility companies, demonstrated by recent contracts such as an eight year, £720m contract with Scotia Gas Networks (SGN) to replace 2,500 miles of gas mains replacement in South East England. “As one of the UK’s leading providers of infrastructure services, Morrison US has a long track record in a sector with exciting growth prospects,” said Cognetas partner, Jonathan Mussellwhite. Edmund Lazarus, the Englefield Capital partner, added: “We are delighted to be working with the exceptional management team at Morrison. The business they have built provides consistently outstanding service to its customers and has exciting potential for growth as an independent business.” With offices in Frankfurt, London, Milan and Paris, Cognetas specialises in buy-outs up to €750m (£574m) in business services, healthcare, industrial and consumer related industries and advises funds of €2.26bn (£1.73bn). Englefield Capital is an independent private equity firm with committed equity funds of €1.8bn (£1.4bn) making investments in buyout and development capital. It targets equity investments of €30m to €150m in Middle Market companies across Europe. AWG was acquired in 2006 by a private consortium, Osprey, which comprises Canada Pension Plan Investment Board, Colonial First State Global Asset Management, Industry Funds Management and 3i Group.

 

< Prev		Next >