Ferrovial expands UK services market share with Enterprise acquisition

Ferrovial, through Ferrovial Services, has reached an agreement with international investor 3i to acquire Enterprise, one of the UK’s leading providers of services to utilities and the public sector. The operation was valued at 385 million pounds–or around 443 million euro.

Ferrovial Services, which has been operating in the UK through Amey, will double the size of its UK business with the acquisition of Enterprise, the Spanish company said in a press release. The acquisition is set to accelerate its entrance into utilities services and enhance its positioning in environmental services.

Closure of the transaction is subject to approval by the European Commission. Enterprise will be integrated into Amey once approval is obtained. Integrating Amey and Enterprise will generate cost and revenue synergies estimated at around 40 million pounds, according to Ferrovial.

“This acquisition fits with our strategic objective of profitable growth through selective acquisitions and it enables us to expand our Services business,” said Íñigo Meirás, CEO of Ferrovial. “The deal will strengthen the operations currently conducted via Amey.”

Ferrovial has been operating in the UK since 2000. It currently operates through its Construction, Services and Airports divisions. Amey, acquired by Ferrovial in 2003, is a major player in the UK market in services to transport and social infrastructure. It works with public and regulated clients in a range of sectors, including justice, aviation, central government, education and transport. It has over 11,000 employees.

Enterprise had 1.1 billion pounds (more than 1.2 billion euro) in revenues in 2012, excluding the joint venture with Mouchel, which is not included in this acquisition. It has 9,600 employees and provides environmental, property and utilities services as well as road maintenance for public and regulated sector clients.

“The deal strengthens our position in markets with growth potential. In terms of client types, range of services and geographical footprint, the two companies are highly complementary and offer great potential to share resources.” said Santiago Olivares, CEO of Ferrovial Services.

Ferrovial Services will appoint Mel Ewell, current CEO of Amey, as CEO of the newly combined company once the transaction is completed. “This acquisition will be pivotal for the UK marketplace, creating a business with the breadth and depth of service to respond to today’s market dynamics. Public and regulated clients are seeking radical reform in the shape of more efficient services which don’t compromise on quality or the service to the public,” added Ewell.

With an order book of over 11 billion pounds (12.5 billion euro), operations in 130 large European cities and with major industrial clients, Ferrovial Services is a leading player in Spain and the United Kingdom in its main lines of business: infrastructure maintenance, environmental services, facilities management and energy efficiency. It has recently expanded into Poland and Qatar.

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The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.

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