Carillion acquires Canadian support services firm for up to £63m

CONSTRUCTION and support services giant Carillion has bought a Canadian firm for up to £63m.

The Wolverhampton company has acquired Outland Group, a support services business.

Outland is a privately-owned business, which started in 1985.

It is a provider of remote-site accommodation and associated services. These include accommodation, camp management, catering, maintenance and housekeeping to public and private sector customers across a wide range of sectors, including mining, utilities, forestry, gas and oil.

The existing senior management team of Simon Landy, David O’Connor and Jeff Taylor, who were also the major shareholders in Outland, will join Carillion and remain with the business.  
 
Carillion says the acquisition complements and enhances the existing skills and capabilities of its support services business in Canada, in line with its strategy of accelerating the development and growth of services activities across that country.

Currently, Outland is delivering projects or actively bidding for contracts in nine of Canada’s 13 provinces and territories.

The consideration will be paid in instalments from Carillion’s existing cash resources, with the total dependent on the financial performance of Outland.

The first instalment of some £11m, of which approximately £5m relates to the acquisition of cash and excess working capital on Outland’s balance sheet, will be paid in 2015, with further instalments in 2016 totalling approximately £25m. 

The balance will be paid in 2018 and 2019 and this will be based on 4.5 times 51.5% of Outland’s average EBITDA in 2015, 2016 and 2017, but capped so that the total consideration does not exceed £63m.

At 30 September 2014, Outland had gross assets of £38.5m. In the 12 months to 30 September 2014, it had revenue of £112.2m and pre-tax profit of £12.3m. 

Carillion chief executive Richard Howson said: ”Acquiring Outland is another important strategic step in the development of our support services business in Canada. 

“Outland brings complementary skills and knowledge to Carillion and its culture complements our own. 

“It has built a reputation for delivering high-quality, value-for-money services to a portfolio of blue chip private and public sector customers and is well-positioned in a diverse range of growth markets.”