Ground engineering specialist Keller (KLR) has announced a proposal to buy North American Piling, one of the largest foundation specialists in Canada, for £144m, with a performance-related deferred consideration of a further possible £58.5m.
To help finance the deal Keller is placing 6.6m new shares at 890p a share, a 1.8 per cent discount to the market closing price on 10 June, although the shares have since moved up to 943p. The balance will be drawn from existing banking facilities.
The deal is expected to be immediately and significantly earnings enhancing, with North American Piling generating revenue of C$236.5m (£150m) in the year to March and operating profits of C$38.5m. The group has a diverse revenue stream, with commercial and public sector work accounting for half of group turnover, while industrial work and oil sands revenue account for a quarter each.
Accordingly, analysts at Investec Securities have increased their pre-tax profit forecast for the current year from £55m to £61.7m and EPS from 57.1p to 61.3p.
