Consultancy business Rhead Group sold to engineering firm in £36m deal
COVENTRY-based professional services consultancy Rhead Group has been acquired by engineering company Costain group in a £36m deal.
Rhead Group, established in 1985 and employing more than 550 people, provides a range of solutions for the life cycle of infrastructure, construction and asset management programmes, primarily in the UK, for a number of blue-chip customers including National Grid, Wales & West Utilities and BAE Systems.
Rhead Group’s senior management team, including CEO Nigel Curry, will remain with the business.
Costain’s strategy is to focus on major customers addressing national needs in energy, water and transportation.
Explaining the acquisition, It said those customers are consolidating their supply chains and are seeking an increasingly integrated service offering from their Tier 1 service providers through larger, longer-term collaborative contracts.
Costain says Rhead Group will further enhance its programme management and advisory capability across all of its operations.
Its acquisition of Rhead Group has been funded from existing cash and debt facilities.
In the year ended 31 July 2014, Rhead Group generated revenue of £63.5m and EBITDA of £5.2m (before exceptional administrative expenses of £0.7m).
Rhead Group will be integrated into Costain in the current financial year and the acquisition is expected to be earnings enhancing from 2016.
It will join Costain’s Power sector and report into the Natural Resources division.
Andrew Wyllie CBE, chief executive of Costain, said: “We are delighted to announce the acquisition of Rhead Group which has a well-established reputation for its collaborative approach, focus on innovation and service delivery excellence.
“This transaction accelerates the development of Costain and further broadens our range of capabilities to meet the requirements of major blue chip customers, providing greater ability to deliver integrated solutions across the full life cycle of a project.”
Birmingham’s Catalyst Corporate Finance was lead adviser on the deal.
