Carillion grows power business with £33m deal
CONSTRUCTION giant Carillion has bought a 60 per cent interest in the trade and assets of power line construction and maintenance company Rokstad Power.
The total cash consideration for the acquisition is up to £33m, with £11m guaranteed by the end of the year and £10m next year.
In 2016 and 2017, Carillion will pay up to £12m in several installments, dependent upon Rokstad’s financial performance.
In addition, Carillion has committed to buying the remaining 40 per cent interest in Rokstad after five years, at a multiple of 4.5 times Rokstad’s 2019 earnings before interest, taxes, depreciation, and amortisation, capped at a maximum additional consideration of £42m.
Rokstad, which is based primarily in Canada, has over 600 employees. Carillion stated that the firm was “well positioned to meet the growing demand for electricity and the need to rebuild ageing electric power infrastructure”.
Carillion chief executive Richard Howson said the deal was “an important strategic step” in the development of the firm’s transmission and distribution business.
He added: “Rokstad’s knowledge, skills and culture complement our own. This acquisition will therefore create significant new opportunities for us to grow our transmission business and capitalise on the unprecedented pipeline of work in the power transmission and distribution markets through extending our offering to new and existing customers.”
Carillion’s share price fell by just over one per cent yesterday.