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Mears buys loss-making social housing firm Jackson Lloyd

1 Oct 10 Mears has acquired Wigan-based social housing contractor Jackson Lloyd for £2.7m.

Mears has acquired Wigan-based social housing contractor Jackson Lloyd for £2.7m.

The firm operates primarily in the north west of England and employs 450 people.

It will be integrated into Mears, which expects to generate “significant” cost and efficiency savings as a result. The initial restructuring and mobilisation will cost £1m.

Mears has paid £2.7m in cash for the acquisition, and has also repaid £2.1m of net debt. The deal may be worth a further £1m subject to performance.

Jackon Lloyd's unaudited accounts for the 15 month period ending 31 March 2010 show revenue of £38.6m and a loss before tax of £3.8m.

The last audited accounts, for the 12 month period to 31 December 2008, reported turnover of £31.5m and a pre-tax loss of £400,000.

It has an order book of in excess of £80m.

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The firm's balance sheet shows net liabilities in the region of £1.4m, including a net debt of £2.1m which was repaid following agreement of the acquisition. Gross assets as at 31 December 2008 were £8.6m.

Mears said Jackson Lloyd has recently gone through a restructuring where “overheads have been significantly reduced together with an increased focus on underlying operating margin”.

It added: “The principal benefits of the acquisition are anticipated to arise in 2011 and beyond; it is expected to be earnings neutral for the year ending 31 December 2010 (before the costs of restructure) and earnings enhancing for the year ending 31 December 2011.”

Bob Holt, chairman of Mears, said: "The acquisition of the JL business fits comfortably into our social housing division and broadens our footprint in the North West of England.

“I am delighted to welcome a further 450 employees into the Group. We continue to seek to acquire businesses with the potential to meet the strategic objectives of the Group."

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