AMEC homes in on Milton Keynes as new HQ for DPS division
Milton Keynes is to become the new HQ for what was Amec plc’s national building business (DPS) following its £26 million acquisition together with Amec Developments (ADL) by construction and urban regeneration group, Morgan Sindall.
Amec Design and Project Services Ltd’s building division includes a 100-strong workforce in Ipswich, which will be incorporated into Morgan Sindall’s construction and infrastructure services division, Bluestone.
Some 800 staff in total will transfer from the DPS construction division to Bluestone, doubling the size of the current operation which is intending to re-brand to reflect the new enlarged business.
Graham Shennan, Bluestone’s managing director who will head up the enlarged construction division, said: “With a combined revenue of almost £750 million, the addition of DPS’ construction business more than doubles the size of our construction division and gives us enhanced national and major projects capability as well as coverage in Scotland. It will position us as a major player in UK construction.”
DPS has a revenue pipeline of £800m and operates in the UK’s health, defence, industrial, utilities and transport sectors, employing around 2,800 people on site and across its five nationwide offices which include Stratford-upon-Avon, Birchwood (Warrington), Darlington and Renfrew in addition to Ipswich.
Formed in January 2006 from the integration of Amec Design and Management and Amec Construction Services, DPS specialises in medium to large size contracts, working mainly in education, health, defence, retail, industrial, transport and nuclear sectors.
DPS projects are worth between £5m and £320m and clients include MoD, the Highways Agency and BAA. For 2006, the company achieved an operating loss of £27.4m on turnover of £685.4m.
While the construction business of DPS will be merged with Bluestone, its civil engineering functions will be integrated within Morgan Sindall’s construction and infrastructure services divisions, Morgan Est. The design side of DPS will act as a professional services business working closely with Morgan Est and Bluestone.
The addition of DPS and ADL gives the enlarged Morgan Sindall group a pro forma order book at 31 December 2006 of £4.1 billion.
Whilst Morgan Sindall’s Construction division has traditionally focused on smaller scale assignments, DPS has focused on larger assignments. Morgan Sindall believes the combination of the two businesses will create an integrated design and delivery business that offers customers a full range of services nationally extending the geographical reach beyond England into Scotland.
“This acquisition is a significant next step for Morgan Sindall. It substantially adds to our existing divisions and opens up huge growth opportunities in our construction and regeneration markets,” said John Morgan, Morgan Sindall’s executive chairman.
Under the terms of the acquisition, Morgan Sindall will acquire the entire share capital of ADL and the assets of DPS which include its current and future contracts. Specifically, Morgan Sindall has agreed to acquire approximately 150 ongoing DPS contracts and the pipeline of future projects.
Morgan Sindall will pay £55m to Amec for the goodwill associated with ADL and DPS. On completion ADL and DPS will have net liabilities of £29m, including cash of £8m. Amec will compensate Morgan Sindall in cash for the net liabilities position at completion of £29m. Consequently, the consideration will be £26m.
ADL is a UK market leader in securing and delivering 10-15 year, large-scale, mixed-use office, retail, leisure and residential schemes in a long-term growth market and brings to Morgan Sindall leading expertise and an in-depth knowledge of the urban regeneration markets.
It will give Lovell access to ADL’s mixed use and commercial /retail expertise as well as strengthen its position in residential regeneration by adding commercial capability which is essential for the delivery of mixed-use regeneration schemes.
ADL is currently involved in more than 30 mixed-use development projects with a total area in excess of 20 million sq ft worth £2.5 billion in value. It has strong partnerships with major public and private landowners, regeneration agencies and local authorities.
The company’s landmark schemes include a £120m, 150,000 sq ft retail and residential development at Eastlands in Manchester which includes the UK’s largest ASDA Wal-Mart store and the Newcastle Quayside redevelopment, a £40 million pioneering office, hotel, leisure and residential scheme.
For the year ended 31 December 2006 ADL achieved an operating profit of £32.3m on turnover of £72.2 million.