Construction and support services group Kier has acquired materials recycling business Pure Recycling Warwick and Pure Buildings in a deal valued at up to £7.1m in cash.
Kier will pay Nicholas Spencer and Jodie Spencer an initial £2m, and a further maximum of £5.1m, which is contingent.
Pure Recycling and Pure Buildings own a materials recycling facility which is under construction and is currently due for completion in March 2011. It will be one of the largest MRFs in the UK and will be able to process a minimum of 25 tonnes of recycled waste per hour.
Kier Group chief executive Paul Sheffield said: "We are delighted with the acquisitions which strengthen Kier's waste management and recycling business and will leave the Group well placed to take advantage of future market growth in the sector. In particular, we look forward to working closely with local authorities and councils to help them to achieve their recycling targets."
Meanwhile, in an interim management statement, Kier said trading to date was “as expected” with “net cash balances at healthy levels”.
In construction, its order books of secured and 'probable' work provide all of its targeted revenue for the year to 30 June 2010 and 82% of targeted revenue for 2011.
In social housing, Kier said “demand remains high” and its mixed tenure model is providing the firm with “good opportunities”. Recent contract awards include an £8m award for Birmingham Municipal Housing Trust and a £15m award from Leicester Council.
Kier is also preferred bidder on a £24m project for Bolsover Council and shortlisted as one of two bidders on the £50m mixed tenure housing PFI scheme at Woking.
Its portfolio of PFI projects now totals 14 including the first and second phases of the Kent BSF schools project and the £40m Gloucester Fire Stations project, on which the firm is preferred bidder.
The statement summarised: “We remain in a period of economic uncertainty and the impact of the measures and policies of the incoming coalition government is as yet unknown. However, Kier is well placed to attract construction work through its wide network of local offices and through the numerous frameworks in which we are involved.
“In the outsourcing sector we are experiencing an increase in the number of opportunities as businesses, both in the public and private sectors continue to examine their cost bases.
“All of this means we are on track to deliver an encouraging underlying performance this year.”