Morgan Sindall buys Connaught’s social housing contracts but 700 jobs go
The Manchester office of accountancy firm KPMG has concluded a £28m deal to sell the majority of ongoing contracts for the social housing division of Connaught to construction group Morgan Sindall.
But it has decided to make 700 staff redundant while attempting to find a buyer for the group’s remaining contracts.
In a statement KPMG said the positions were spread throughout the UK and they were unable to exact locations.
Social housing division Connaught Partnerships, which is headquartered in Leeds and employs 4,400 staff across the UK providing maintenance services to social housing associations, went into administration alongside the building services group’s parent company, Connaught, which is based in Exeter, on Wednesday.
The division provided maintenance services to a raft of social housing clients, including One Vision Housing Association in Sefton and Fusion 21 of Huyton, which provides maintenance services for several Merseyside-based housing associations.
Morgan Sindall said the deal, which will see its sLovell Partnerships social housing division take on the work, would allow “essential maintenance services to continue without interruption” and around 2,500 employees connected with the ongoing nationwide contracts will transfer to Lovell as part of the agreement.
It added that the sum paid for the assets was a discount to their net book value and has been paid from existing cash resources.
John Morgan, executive chairman of Morgan Sindall, said: “This is a step change for Lovell. The acquisition significantly increases the scope and scale of our planned and reactive maintenance activities and further develops our market-leading position.
“Our focus now will be to ensure a smooth handover of the contracts and to minimise disruption to essential maintenance services.
“We look forward to working with our new and existing clients and to provide them with a high level of service, as well as protecting jobs on the contracts we are acquiring.
Brian Green and Dave Costley-Wood from its North West restructuring team, worked on the deal alongside Giles Taylor and Mark Firmin from the northern corporate finance team.
Richard Heis, restructuring partner at KPMG and joint administrator, said:
“It has been a considerable achievement to agree such a substantial transaction in such a short amount of time after our appointment, which reflects the commitment of Morgan Sindall and the efforts of Connaught Partnerships’ management and staff to secure the deal.
“We are continuing to seek to novate the remaining contracts to other providers and remain hopeful that more staff will transfer as part of this process.”
