Construction, services and property group Kier, which recently conducted a strategic review of its plant business, has sold its temporary accommodation business and its mechanical plant and small tools unit.
The small tools unit was sold to Ashtead Plant Hire for a maximum total consideration of £4.01m, of which £3.76m was paid in cash on completion.
The temporary accommodation business and its related property assets were sold to Wernick Hire for a maximum consideration of £11.7m, of which £11.3m was paid in cash on completion.
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In each case the balance of the consideration has been retained ahead of asset inspections. As part of the sale, Kier has entered into trading agreements with both Wernick and Ashtead to ensure continued availability of these assets for Kier's businesses.
Paul Sheffield, Chief Executive of Kier, said: "It is important for Kier to respond to changing market conditions and, by focusing on our core business and building on our strengths, we can ensure that Kier remains a strong and resilient business and continues to grow in our chosen markets."
The firm also announced that it has completed its investment in Biogen, establishing a 50/50 joint venture with the owner of Bedfordia Group. Biogen designs, builds and operates large-scale anaerobic digestion plants to process food waste and produce renewable energy.
Kier's total investment is now £24.375m, of which £5.375m was invested on completion. A further £2.5m of equity will be invested in December of this year and another £2.5m in July 2013. The remaining £14m is scheduled to be invested in instalments over the next four years to finance new anaerobic digestion plants.
Biogen, in conjunction with Kier, plans to build a number of plants in strategic locations to serve the requirements of local authorities, food retailers, food manufacturers and commercial waste providers to the food and retail industries.
Paul Sheffield, Chief Executive of Kier, said: "We see significant potential in an attractive market for the development of the business in the coming years.
"There is significant demand for new anaerobic digestion plants across the UK, with 7.0m tonnes of food waste being produced per annum and current anaerobic digestion capacity of only 2.5m tonnes, resulting in a need for a further 100 plants.
"Following an initial investment phase, Kier expects the return on capital to exceed 15% and for the business to be operating nine plants by 2017.
As at 30 June 2012, Biogen had gross assets of £15m. For the year ended 31 December 2011, Biogen made a loss before tax of £1.7m following significant investment in business development and research and development.
The share price fell 0.56% to 1,251p by 08:58.
NR
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