Morrison has more than 2,500 employees, serving social housing clients across the UK, including Manchester City Council, Home Group, Leeds City Council, North Lanarkshire Council and Lambeth Living.
Although Morrison is currently loss-making, its contract base is regarded as a good fit with Mears' structure. Mears said that the acquisition increased its capability to run very large contracts.
For the year ended 31 March 2012, Morrison reported turnover of £291m and an operating loss, before exceptional items, of £7.6m. Gross assets at 31 March 2012 were £70.5m. Morrison has this year restructured or exited a number of mainly loss-making contracts, reducing the pro forma annualised loss to approximately £5.3m.
Mears group chief executive David Miles said: "I am delighted to have completed the acquisition of Morrison at a price which fairly reflects its current profitability. This deal further strengthens Mears' market leadership and contract profile in social housing. Given our strong operational platform and differentiated service delivery ethos, together with our ability to turn around businesses, I am confident that we will deliver significant improvements to Morrison's contracts, customers, tenants and employees."
Mears will pay Anglian Water £16m in cash and £8m in new Mears shares.
Mears also issued a trading update, saying that the first half of 2012 “saw the most intense period of new contract mobilisation in our history”. Seven major new contracts started in this period with an annual value of more than £50m. In the past four months, these have bedded down and are starting to show an improvement in the operating margin.
Since 1 July 2012, Mears have secured new contracts worth £107m in social housing, taking order intake for the current year to £142m. Mears’ care business has brought in a further £58m so far this year.