Morgan Sindall to acquire AMEC businesses

Morgan Sindall plc, the construction and urban regeneration group, is to acquire Amec plc’s national construction and civil engineering business, Design and Project Services Limited (DPS) and its large-scale, mixed-use urban regeneration business, Amec Developments (ADL). The acquisition of the two companies, which fit neatly with Morgan Sindall’s existing construction offerings, will significantly increase the Group’s size and construction capability and accelerate the company’s entry into the attractive, large scheme, mixed-use urban regeneration market, a long-term growth sector. Morgan Sindall, which is paying a total of £26 million for both businesses, will acquire the entire share capital of ADL and the assets of DPS.

The acquisitions support Morgan Sindall’s stated strategy to develop a market-leading position in its UK construction, affordable housing and infrastructure services divisions.

“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,” says John Morgan, Morgan Sindall’s executive chairman. “Morgan Sindall represents an excellent home for ADL and DPS, their employees and customers and we look forward to further developing the enlarged group.”

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. It brings to Morgan Sindall leading expertise and an in-depth knowledge of the urban regeneration markets. ADL’s service offering also complements and enhances the development capability of Lovell, Morgan Sindall’s affordable housing business which is a market leader in mixed tenure residential schemes. 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 £120 million, 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.

Headquartered in Salford Quays, Manchester, and with offices in Newcastle, Leeds and London (Surbiton), ADL which employs 65 staff, will form a new division of Morgan Sindall specialising in mixed-use urban regeneration. The business will be headed up by ADL’s current joint managing directors Matt Crompton and Nigel Franklin.

DPS, which has a revenue pipeline of £800 million and operates in the UK’s health, defence, industrial, utilities and transport sectors, employs around 2,800 people at offices in Stratford-upon-Avon, Birchwood (Warrington), Darlington, Ipswich and Renfrew. Following the acquisition, the company’s civil engineering, building and design functions will be integrated within Morgan Sindall’s construction and infrastructure services divisions.

DPS’ building business will be integrated with Bluestone, Morgan Sindall’s construction division headquartered in Milton Keynes, which is to be rebranded to reflect a significantly enlarged construction business with a strong design capability. “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,” says Graham Shennan, Bluestone’s managing director who will head up the enlarged construction division.

DPS’ civil engineering capability will join Morgan Est, Morgan Sindall’s Rugby-headquartered infrastructure services division. “This will significantly strengthen and extend Morgan Est’s design and project capability in the tunnelling, water, and roads sector and will allow us to compete for larger, more complex schemes,” says Mark Cutler, managing director of Morgan Est. DPS, whose clients include MoD, the Highways Agency and BAA, undertakes a wide range of projects worth from £5 million up to £320 million.

The design side of DPS will act as a professional services business working closely with Morgan Est and Bluestone.

All DPS and ADL staff are expected to transfer across to Morgan Sindall.