Galliford snaps up Morrison Construction

Galliford Try has bought Morrison Construction from AWG for £42m. The move will transform Galliford into a major construction player with an annual turnover of around £1.2bn.

Morrison Construction has an annual turnover of £350m a year, which is evenly divided between two operating divisions: building and civil engineering. Prior to the sale, it was one of four operating divisions within the £1bn-a-year turnover Morrison plc, bought by AWG five years ago.

The remaining three stay in the hands of David Tydeman, Morrison’s chief operating officer. “There is not a ‘For Sale’ on any of them,” he said.

“Construction was the worst-performing element when I arrived here. It was losing money and was closely linked to the property team. Its risk profile is different from the other three.

“Over the two years I have tightened the focus. First, we got building into profit and then civils. Ken Gillespie, brought in as MD of Morrison Construction in March 2005, has done a really good job and he goes with the sale.”

Galliford had been tracking Morrison Construction for 18 months.

Galliford was put onto the shortlist of potential buyers in late autumn. Detailed discussions between David Calverley, Galliford’s chairman, and Jonson Cox, chief executive of AWG, the utility group which owns Morrison, resulted in Galliford winning preferred bidder status in early January.

Within Galliford, construction workload will rise dramatically. Andy Sturgess will head up the £600m-a-year building operations while Gillespie has £400m-a-year of workload covering infrastructure (both water and civils), the northern business (water and rail) and telecoms.