Mears sells M&E division for £1

Grant Prior 11 years ago

Mears is selling its specialist M&E arm Haydon to its management for £1.

The deal will see Mears receive up to £7m if the business is sold-on again.

Haydon Mechanical and Electrical (HMEL) had a turnover of £62.3m for the year ended 31 December 2012 and made a loss before tax of £1.8m.

For the six months ended 30 June 2013, HMEL generated unaudited revenues of £18.7m and a loss before tax of £1.4m.

The firm specialises in the design and installation of mechanical and electrical services with a focus on new build residential developments.

HMEL is run by its managing director, David Cutler, from its head office in London’s Docklands.

Mears bought the firm in 1999 but has since concentrated on the social housing and care markets.

Mears said: “In the current operating environment for mechanical & electrical engineering services, with limited new build opportunities and increasing competition for these services, HMEL has been running at a loss.

“In addition, the business is today less of a focus for Mears as it looks to grow its two profitable core divisions of social housing and care.

“The Board has reached the conclusion that it is in the interests of shareholders to dispose of HMEL.”

HMEL currently owes £15m to Mears through an inter-company loan which has been written down to £9m as part of the deal.

The sale will see a one-off write-down to Mear’s income statement of approximately £17.5m.

David Miles, Chief Executive, Mears Group, said: “I am delighted to have agreed a sale of Haydon, our M&E division.

“Haydon played a significant role in the growth and maturity of Mears over the last 14 years.

“I would like to thank the Haydon management team and wish them future success.

“The activities of Haydon have now become non-core and the transaction is good for Mears and will now allow the Group to focus solely on growing its core operating divisions.”

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