Engineering solutions provider Costain Group Plc. (COST.L) Monday announced that it has acquired Rhead Group for a total cash consideration of £36 million on a debt free / cash free and normalised working capital basis. The consideration has been funded from Costain's existing cash and debt facilities.
Rhead Group provides a range of solutions for the lifecycle of infrastructure, construction and asset management programmes, primarily in the UK, for a number of blue-chip customers including National Grid, Wales & West Utilities and BAE Systems.
Rhead Group's senior management team, including Nigel Curry, Rhead Group CEO, will remain with the business, the company said.
Rhead Group will be fully integrated into Costain in the current financial year and the acquisition is expected to be earnings enhancing from 2016.
Costain's strategy is to focus on major customers spending billions of pounds addressing national needs in energy, water and transportation. Those customers are consolidating their supply chains and are seeking an increasingly integrated service offering from their Tier 1 service providers through larger, longer-term collaborative contracts.
Rhead Group will further enhance Costain's programme management and advisory capability across all the Group's operations as part of that integrated service offering.
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