Morgan Sindall Rises After Agreeing to Buy Contracts From Connaught Unit
Morgan Sindall Group Plc rose the most since December after agreeing to buy most of the ongoing contracts and related assets of the social housing unit of Connaught Plc for 28 million pounds ($43.1 million).
The transaction should generate about 200 million pounds in extra annual revenue for Lovell Partnerships, Morgan Sindall’s affordable housing unit, the company said in a Regulatory News Service statement today. About 2,500 workers connected with the contracts will transfer to the company as part of the agreement. Morgan Sindall climbed as much as 12 percent.
“The acquisition significantly increases the scope and scale of our planned and reactive maintenance activities and further develops our market-leading position,” Morgan Sindall Executive Chairman John Morgan said in the statement.
This week, Exeter, England-based Connaught appointed administrators from KPMG after it couldn’t restructure its financing and obtain funding. It was suspended from London trading Sept. 7. On Aug. 6, the company said it expected to record a full-year “material loss” on earnings before interest, tax and amortization, and it would need to make “significant writedowns” on assets.
Morgan Sindall rose as much as 79 pence to 740.5 pence and traded at that price as of 9:06 a.m. The stock has gained 23 percent this year, giving the London-based company a market value of 319.7 million pounds.