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Kier disposes of fleet arm through MBO

Date: 07 July 2015   |   Author: Tristan Young

Property firm Kier Group plc has disposed of its fleet and passenger services division through a management buy out funded by private equity firm Endless.

In a stockmarket statement at the start of July, the company said: "Kier Group has completed the disposal of its fleet and passenger services business, Kier FPS Limited, to Alpha Holdco 1 Limited, an entity managed by Endless LLP, for a total cash consideration of £17.9m paid in full on completion. The disposal includes the transfer of FPS' finance lease debt of approximately £32m (as at 30 June 2015)."

FPS is a provider of specialist vehicle contract leasing and fleet management services to public sector clients. FPS became part of Kier as a result of an acquisition in 2013.

Commenting on the sale, Haydn Mursell, Kier Group's chief executive, said: "FPS was acquired as part of the May Gurney transaction. However, in light of our strict return on capital requirements, we concluded that it would be appropriate to dispose of FPS to a specialist operator which will be managed by the existing management team."

In the year ended 30 June 2015, FPS' estimated third party revenues and profit before interest and tax are £34m and £5.6m, respectively.

As part of the MBO led by managing director Ray O'Toole and operations director David Liston, Kier and FPS have entered into a five-year agreement under which FPS will continue to supply Kier with fleet services to its local authority highways and utilities businesses.

Private equity firm Endless also owns a stake in fleet incident management firm FMG. Endless helped fund Andrew Cope's MBO of FMG from previous investor Spirit, earlier this year.



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