Mears snaps up troubled rival Morrison for £24m

Aaron Morby 12 years ago
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Social housing repair specialist Mears has bought loss-making rival Morrison Facilities Services for £24m.

Mears said it was confident it could turn around the troubled contractor to create a powerful force in the social housing repairs sector.

In the last few months, Morrison, which is owned by Anglian Water Group, has lost several contracts and been threatened with contract termination by several local authority clients.

Mears said it expected to spend £8m restructuring and integrating Morrissons, which employs more 2,500 staff, into its business.

The deal hands Mears Manchester City Council, Home Group, Leeds City Council, North Lanarkshire Council and Lambeth Living as new clients.

David Miles, Mears group chief executive said: “This is an exciting acquisition for Mears and we look forward to welcoming Morrison staff to the Mears family. I am confident that this will bring benefits for clients, tenants and staff.

“We will work closely with all partners to ensure a smooth a transition as possible towards an integrated, sustainable, customer focussed Group.”

Mears will pay £16m of the purchase prices in cash, with the balance of £8m in new shares issued to AWG.

Morrison reported turnover of £291m in the year end March and an operating loss, before exceptional items, of £7.6m.

Since then the contractor Morrison has exited a number of mainly loss making contracts, reducing annualised losses to £5.3m.

Two contracts were terminated in London, one with Paragon Housing Group in Richmond and the other with Southwark Council and Thurrock Council warned  that it would not be seeking to extend its five-year term contract.

Under the deal one Morrison contract will by novated to a company owned by AWG.

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