Costain to raise £75m as plans acquisitions to drive growth
ENGINEERING and construction firm Costain yesterday unveiled a £75.1m capital raising yesterday, which it said it would use to accelerate its growth prospects.
Costain said it would raise £25m via a firm placing, while the remaining £50.1m is set to be raised through a placing and open offer.
The engineer’s ambitious growth ambitions come after last year’s failed May Gurney takeover bid.
“We’ve made no secret about our ambition for Costain,” Andrew Wyllie told City A.M. “We need to accelerate our growth organically and through targeting acquisitions. We have made three acquisitions over the past two years and I expect in two years’ time we will have made three more.”
He said Costain was looking for highly specialist solutions businesses which would add something new to the business, citing the example of EPC Offshore, an Aberdeen-based specialist oil and gas project management services company that Costain bought last August.
Last May the firm was trumped by Kier on a proposed takeover of road maintenance group May Gurney after a high-profile bidding war.
FTSE-listed Costain yesterday reported a 10 per cent rise in pre-tax profit to £31m and a 25 per cent increase in its forward order book to a record figure of £3bn.
It raised its dividend this year by seven per cent.
Shares plunged 17 per cent to 265p, which analysts attributed to to investors’ fears that their share holdings would be diluted via the placing.
BEHIND THE DEAL
LIBERUM | STEVE PEARCE
1 PEARCE joined Liberum in 2007, having previously worked at Arden Partners, Societe Generale and PwC. He is a graduate of Durham University and a chartered accountant.
2 HE CURRENTLY advises mid-market companies on M&A and capital market transactions, with a specific focus on telecoms, utilities, support services and small and mid cap sectors. He worked on the Aim float of Manx Telecom earlier this month.
3 DESPITE being a lofty 6ft5, Pearce used to drive a Mini. It was sandy gold, with two black stripes down the bonnet. Sadly, he let the car go seven years ago.
Also advising…
Liberum acted as joint global co-ordinator, bookrunner and broker on the capital raising, with James Staveley working with Steve Pearce. Investec was also joint global co-ordinator, bookrunner and broker, led by James Rudd, James Ireland and Henry Reast. Rothschild is acting as sponsor and financial adviser, led by John Deans and Neil Thwaites. Instinctif Partners’ Mark Garraway and Helen Tarbet gave PR advice.