Amey pounces on Comax for £145m

by Graham Ridout



Amey's diversification away from mainstream contracting continued last week when it agreed to pay £145 million for support services provider Comax.

The deal for £211 million turnover Comax, which is due to be ratified at an extraordinary general meeting on 17 July, will boost Amey's present turnover to £675 million, of which only one-third, £229 million, comes from construction.

It will also mean that only 9 per cent of Amey and Comax combined profits of £30 million are construction-related.

Comax employs 1,500 and specialises in providing secure services and has clients such as the Ministry of Defence, GCHQ, and the Police Authority of Northern Ireland.

Formerly the business was part of the Defence Evaluation and Research Agency (DERA), but was the subject of a management buy out in April 1997. Around 75 per cent of Comax turnover comes from DERA.

Amey chairman Neil Ashley said: "This is a great deal for us and puts us as one of the leaders in the support services sector and the leader in secure support services." Ashley said that the acquisition, "improves the growth prospects for Amey and there will be lots of areas where the two businesses can cross-sell."

Amey chief executive Brian Staples added that the growth in support services was running at between 15-20 per cent per annum and that Amey, "ought to be able to grow at around that level."

The deal positions Amey slightly ahead of WS Atkins on turnover in the support services market. Serco heads this market but Staples said that Amey would benefit from higher margins than Serco because it was not dependent on blue-collar workers.

Ashley believes the acquisition will strengthen Amey's case for being reclassified in the Stock Exchange under support services, not construction.