Elliot Group swoops for Speedy Hire division
TOOLS and equipment firm Speedy Hire has sold its loss-making temporary accommodation division to Elliot Group, which has a number of operations in Yorkshire, for £34.9m.
The business has taken a £16m hit on the sale of the division, which had net assets of £52.4m, but it said the deal would allow it to realise “significant value” and focus on its core operations.
In a stock market statement the Haydock-based firm said its Accommodation Hire business, previously known as Speedy Space, had been bought by Peterborough-based Elliot Group, a subsidiary of the US group Algeco Scotsman.
Elliot Group has five offices in Yorkshire.
The business provides temporary accommodation and storage units for hire or sale from 14 depots across the UK. Operating losses have widened at the division in the past two years, from £2.1m on sales of £40.6m last year to £4.5m on sales of £35.5m in the year to March 31.
Speedy Hire said challenging trading conditions had exerted “significant downward price pressure”, resulting in poor levels of profitability.
“The disposal is consistent with the group’s strategy of focusing on its core operations and improving its operating margin and return on capital. The disposal will realise significant value for Speedy and the net proceeds will be used to strengthen further the group’s balance sheet.” said the company.
Chief executive Steve Corcoran said: “Financially, the disposal delivers a pro-forma increase in both operating margin and return on capital. It also delivers a reduction in group borrowings and enables Speedy to focus on investing in our higher margin core operations and to develop further our non-hire services.”
As part of the transaction Speedy will provide service and maintenance support for three years to more than 1,600 power generators which are integrated within the accommodation units.
A team from law firm Pinsent Masons advised Speedy Hire on the deal.
The team was led by Andrew Black and Catherine Hemsworth, and also included Richard Parkinson and Manisha Patel.
Linklaters advised Elliot Group.
