Gleeson's rail business sold to Morgan Sindall for £23m

Gleeson has parted with a second chunk of its empire, selling its rail engineering business Gleeson MCL to Morgan Sindall for £23m.

The MJ Gleeson Group has found itself on the rack in recent times as a result of losses, first in housebuilding and more recently in construction. It gave the green light for a management buy-out of Gleeson Building, the £175m-a-year turnover division headed by Martin Smout, a year ago. This move was interpreted by many as giving the green light for a wholesale break-up of the remaining parts of the group.

Gleeson MCL made a pre-tax profit of £2.1m in the 12-month period to 30 June 2005 at which time its assets ran to a value of £18m, including £6m of cash.

It has 143 employees, all of whom will transfer to Morgan Sindall.

Gleeson MCL is led by Danny Duggan who was with Tarmac Construction for five years before joining Mabey Construction in 1984.

Gleeson bought Mabey in 2000 for £6m, rebranding it as Gleeson MCL. Duggan became managing director two years ago. Gleeson MCL will once again rebranded, this time to Morgan Est Rail and it will work alongside Morgan Est’s existing tunnelling team.

The latest deal will trigger a cash inflow to Gleeson of over £18m which will be used to trim back its level of debt.