Multi-million pound highland fling for MK building firm
Rok plc, the Milton Keynes-based builder, has expanded its Scottish operation 350 per cent following the £31.3 million acquisition of the Highlands building firm, Tulloch Construction.The incorporation of a long-established building group with a strong regional brand and reputation sits well with Rok’s ambition of becoming the ‘nation’s local builder’, holding a presence in the UK’s major towns and cities.
The purchase gives Rok widespread coverage in Scotland, increasing its 250-strong workforce to over 1,100 and adding eight offices to its existing Glasgow and Rosyth facilities. George Fraser, head of Tulloch Construction, takes the position of Rok’s managing director in Scotland.
Garvis Snook, Rok CEO, said: “Tulloch Construction Group, with its strong presence in Scotland and focus on low risk work, is a perfect fit for Rok in terms of activities and ethos. The combination of Rok and Tulloch Construction Group should derive significant benefits for customers, employees and shareholders of Rok.”
David Sutherland, a new Rok board member as well as executive chairman of TCGHL and Tulloch Ltd said: “This is a positive deal for the employees, customers and vendor of Tulloch Construction Group. Rok represents a good home for Tulloch Construction Group with the strong alignment in values and strategies of the businesses.”
In the last five years Rok has grown both organically and through acquisitions from a small regional company with half a dozen offices and an annual revenue of £92m to a nationwide business with more than 2,300 employees and sales in excess of £550m.
It is now a leading provider of property development, building and maintenance services across the UK.
More recently Rok’s growth drive has been based on consolidating the fragmented market in which it operates by making further significant acquisitions, with a particular focus on Rok’s lower coverage areas: The Midlands, the North of England and Scotland.
In July 2006, Rok announced the £4.5m acquisition of Midlands social housing business, Kingfisher Building. At the same time, discussions were ongoing with Tulloch Ltd regarding the potential acquisition of Tulloch Construction.
The company has been active in Central Scotland for some years from a successful base in Glasgow but will gain considerable strength from acquiring Tulloch Construction, least of all from the incorporation of a strong management team.
In the year ended Dec-ember 31, 2005. Tulloch Construction had a turnover of £107m and an operating profit of £3.3m.
The parent company, Tulloch Ltd, is not included in the deal but will be taking a significant shareholding in Rok plc. The deal will see Tulloch’s construction, civil engineering and building services divisions, which are part of Tulloch Construction, transfer to Rok.
Tulloch Ltd retains ownership of Tulloch Homes, which has 170 employees and a £60m turnover, plus a series of joint venture property development and housing companies.
The purchase will be satisfied by the issue of 1.5m consideration shares – valued at £9.4m – to TCGHL, the current holding company of Tulloch Construction, and through a £21.9m cash consideration, which will be raised through the issue of 3,480,000 vendor shares.
Both shares will be issued at a price of 630p.