Kier acquires Buckingham’s rail assets from administrators
Tue, 05 Sep 2023 | BUSINESS SALE
Kier Group has agreed a deal to acquire substantially all of Buckingham Group Contracting’s rail assets from administrators. The deal also includes Buckingham’s HS2 contract supplying EKFB, Kier Group’s HS2 joint venture.
Construction giant Buckingham fell into administration this week after filing a notice of intention to appoint administrators last month. The group, known for its work on football stadia – including a currently ongoing project on Liverpool’s Anfield stadium – reported a pre-tax loss of £10.7 million (on revenue of £665.3 million) in 2021, following a financial hit on a major contract.
Grant Thornton’s Rob Parker, Jon Roden and Kevin Coates were appointed as joint administrators to Buckingham Group Contracting on September 4, subsequently securing a sale of the group’s rail assets to Kier in a £9.6 million deal that secured approximately 180 jobs.
Kier Group CEO Andrew Davies said that the firm is open to targeting “value accretive acquisitions in core markets where there is potential to accelerate the medium-term value creation plan.”
Davies continued: "This acquisition is one such example - it is an excellent strategic fit and accelerates our rail strategy, providing work with new rail clients and increasing our capabilities. I am delighted to welcome our new employees, clients and suppliers to Kier."
Kier Transportation group managing director Joe Incutti added: "The Buckingham Group Contracting rail business had built a very strong reputation for assured delivery in the rail sector. I am pleased that we now welcome 180 new colleagues into Kier Transportation.”
"The team will further strengthen our capability and this helps to bring an end to a period of uncertainty for clients and employees by ensuring continued delivery on existing projects, and the retention of hugely important skills and expertise in the rail sector."
The joint administrators, however, have been unable to secure rescue deals for the remainder of the group’s business, resulting in the loss of close to 500 jobs. Joint administrator Rob Parker said that rescue deals for the group’s other divisions (Building, Civil Engineering, Demolition, Major Projects and Sport & Leisure) were not possible.
According to administrators, the company’s significant cashflow pressures and subsequent losses led directors and advisers to target a refinancing that would have secure the group’s future. However, Buckingham’s legacy issues and ongoing losses were too great to enable these efforts to succeed within an acceptable timeframe.
In Buckingham’s 2021 accounts, its fixed assets were valued at £2 million and current assets at £215.5 million. At the time, the firm owed creditors over £190 million, leaving it with net current assets of £24.6 million.
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