FTSE 250-listed Keller Group yesterday announced that it has agreed to buy Canada-focused engineering firm North American Piling for up to C$320m (£202.5m).
The British ground engineering company will pay C$227.5m up front and up to a further C$92.5m depending on financial performance.
The acquisition was funded via a rights issue which was also announced yesterday, alongside new and existing bank facilities. The firm placed 6.6m shares at 890p per share, raising £58.7m. The acquisition is Keller’s second foray into the Canadian market, having snapped up a smaller company in Toronto earlier this year.
“We have been eyeing Canada for a couple of years now,” chief executive Justin Atkinson told City A.M. “The Canadian construction market was worth $200bn in 2013 and we think there will be significant long term demand there.”
Atkinson said that he is “absolutely confident” that shareholders will approve the acquisition at the meeting on 28 June.
Dependent on shareholder and antitrust approval, the deal is expected to be completed by the end of July.
Acquisitions make up part of Keller’s growth strategy, but Atkinson said that if they do another deal in the foreseeable future it would not be the same size as this one nor in North America. He cited Africa, Turkey or Europe as potential targets.
North American Piling employs 400 staff and posted revenues of C$236.5m this year. Keller’s shares closed up 2.1 per cent at 925p yesterday.
ADVISERS KELLER GROUP
JEFFERIES acted as exclusive financial advisor to Keller on the acquisition with both Jefferies and Investec as joint sponsors. On the equity placing, Jefferies and Investec were joint bookrunners and underwriters. Simon Hardy, Andrew Bell and Steven Latimer led the team at Jefferies. Hardy has been with Jefferies Hoare Govett for five years and recently advised Severfield-Rowen on its re-financing and £45m rights issue. Bell joined Jefferies as head of M&A in 2012 from HSBC and recently advised Lonrho on the £175m recommended cash offer it received from FS Africa. Latimer joined Jefferies in June 2012 from Credit Suisse, establishing the firms' Canadian investment banking practice.
James Rudd and Keith Anderson headed up the Investec team. Rudd is director of investment banking and joined in April 2009 from Dresdner Kleinwort. He has experience of a wide range of corporate finance transactions, including IPOs, mergers and acquisitions, financial restructurings and all forms of secondary equity issues. Anderson is co-head of corporate broking and joined Investec in January 2002, having spent six years at Hoare Govett. RLM Finsbury advised Keller on public relations.