Keller buys leading Singapore ground contractor

Keller Group plc, the international ground engineering specialist, has entered into an agreement to purchase Resource Holdings Limited, a Singapore-based foundation contractor, for an initial cash payment of £30.6million, including an estimated £2.0million of acquired net debt, plus further payments based on future profits.

Resource is a specialist foundation contractor with particular expertise in large diameter bored piling in soft clays. With over 20 years' experience, Resource has an excellent reputation locally and has worked on some of Singapore's most prestigious projects in both the public and private sectors. The senior management of Resource is remaining with the business.

In the year ended 31 March 2009, Resource reported an operating profit of £10.7million on revenue of £52.0million, an operating margin of 20.5%. However, Keller does not expect this exceptional level of profitability to be sustainable over the short to medium term, as the effects of the global recession moderate Singapore's rate of growth.

Completion is expected by the end of October.

Commenting on the acquisition, Justin Atkinson, Chief Executive of Keller, said:"We are excited by this important acquisition, which will significantly increase the size of the Group's operations in South East Asia and add further momentum to our move into heavy foundations in these attractive growth markets."