Julian Bray writes: Spanish construction group, based in Madrid, Ferrovial (which has a 33% interest in Heathrow Airport, and recently sold Stansted Airport), has extended its stranglehold on the City of Peterborough by taking over Enterprise for £385m from 3i venture capital group. 3i was reportedly in advanced talks with Ferrovial over a sale as far back as May last year. The original acquisition by 3i, was beset by cash problems throughout.
Enterprise recently entered into a controversial long term contract with Peterborough City Council, and took over council employees, street cleaning, dustbin collection and a host of grass cutting and park duties. Since that time floral displays in the City have been cut back and cleaning in City environs has been sporadic, prompting a record number of complaints by residents to the website www.fixmystreet.com. Enterpise Peterborough, at a recent neighbourhood meeting confirmed their contract did not extend to cleaning of the Green Wheel, and would be an extra charge to the PCC.
Enterprise (subject to approval by the European Commission) is to be merged with Amey, which Ferrovial bought for £81m in 2003, doubling the size of its UK services business but integrating Amey and Enterprise is expected to save £40m and there will be redundancies throughout the combined group. Amey CEO Mel Ewell will head the newly combined company which will have more than 21,000 employees, revenues in excess of £2.3bn and a combined order book of £8.2bn, a source at Ferrovial* confirmed. Owing to the size of the deal, it is subject to approval by the European Commission.
"This acquisition fits with our strategic objective of profitable growth through selective acquisitions and it enables us to expand our services business," said Íñigo Meirás, CEO of Ferrovial.
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Enterprise had £1.1bn revenues in 2012, excluding a joint venture with Mouchel, which is not included in this acquisition. It has 9,600 employees and provides environmental, property and utilities services as well as road maintenance for public and regulated sector clients. "The acquisition of Enterprise will create value through synergies derived from integrating it into Amey,” said Santiago Olivares, CEO of Ferrovial Services.
Mel Ewell said: “This acquisition will be pivotal for the UK marketplace, creating a business with the breadth and depth of service to respond to today’s market dynamics. Public and regulated clients are seeking radical reform in the shape of more efficient services which don’t compromise on quality or the service to the public. Our leading asset management and consulting capability, paired with Enterprise’s additional range of services, will ensure that the combined company can deliver a truly transformational service.”
* Ferrovial is the Spanish word for Railroad
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