Keller expands into sub-Saharan Africa with bolt-on purchase

9th Oct 2013 07:34

Ground engineering firm Keller is to buy Esorfranki Geotechnical, the largest ground engineering business in South Africa, as it looks to accelerate its entry into selected sub-Saharan construction markets.The FTSE 250 company said that these markets are "where significant growth is expected over the medium to long term, fuelled by major infrastructure and resources-related projects". It will form part of the group's Europe, Middle East and Africa (EMEA) division.Keller is to pay R500m (£31m) in cash for the geotechnical division of Johannesburg-listed civil engineering and construction group Esorfranki Limited. The agreement includes a deferred consideration of R150m (£9.4m) which is subject to certain profit targets over the three years after the acquisition."This important acquisition marks another milestone in our strategy of extending our global leadership by expansion into new, higher growth regions," said Keller's Chief Executive Justin Atkinson.Esorfranki Geotechnical provides design and build services to the mining, civil engineering and construction industries, and has a strong track record of executing projects in other Sub-Saharan African countries, Keller said. It generated R788m (£49m) of revenue in the year to February 28th 2013, 46% of which was earned outside of the South African market."The combination of Esorfranki Geotechnical's local knowledge and resources with Keller's scale, experience and broad range of techniques will make us ideally placed to undertake complex major projects requiring design expertise and multi-product solutions in a region where we expect the longer-term opportunities to be significant." BC