International outsourcing firm Serco has completed the disposal of its Technical Services business to engineering giant AMEC for a total of 137m pounds.
Serco said it saw limited future revenue growth for TS in a highly competitive market, "where future growth is likely to be more orientated toward the civil market and in particular the build of new nuclear power stations". It said that AMEC would be "better placed" to benefit from this shift.
"The transaction is in line with Serco's stated strategy to proactively manage its portfolio of contracts, assessing operations for strategic fit together with their expected future levels of performance and returns," Serco said in a statement on Friday.
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TS, which has 600 employees, works primarily with the UK civil and defence nuclear markets and generated revenues of approximately £70m last year. The disposal proceeds of £137m are 10.5 times the unit's adjusted 2011 operating profit of £13m.
It is expected to have a small dilutive impact on Serco's adjusted earnings.
"I would like to thank our colleagues for their hard work and commitment whilst part of Serco, however, as we take Serco forward, this area of the business has become non-core to the future development of the group," said Chief Executive Christopher Hyman.
"We will continue to serve the defence and science sectors, notably AWE and the National Nuclear and National Physical laboratories, as well as developing our proposition in energy management services. We believe a higher strategic value for these specialist consulting skills can be achieved under alternative ownership, leaving Serco to focus on our long-term contract model delivering high quality and efficient services."
BC
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