Slide 1: Recommended acquisition of May Gurney Integrated Services plc
Kier Group PLC 24 April 2013 Recommended acquisition of May Gurney Integrated Services plc 1
Slide 2: Key messages
Key messages Creates one of the UK’s leading integrated services and construction groups • The Acquisition will significantly enhance Kier’s existing Services business Substantial increase in scale, breadth of offering and geographic reach Excellent access to Local Authorities for outsourcing an
Slide 3: Broader, well balanced Group
Broader, well balanced Group Kier May Gurney Combined Property & Homes Property & Homes £241m £241m Construction Construction 12% Regulated sector Public sector 9% £1383m £1383m £277m £418m 50% 67% 40% 60% Services Revenue £445m 21% Services £1140m 41% Revenue 2011/2012 Revenue 2011/2012 Total Reven
Slide 4: Combined Group Services revenues
Combined Group Services revenues Kier Services revenues (2011/2012)1 Combined Services revenues (2011/2012)2 Maintenance Maintenance LA work Environmental Highways £97m FM Environmental Fleet FM £280m £120m Utilities Other Regulated £180m £120m £45m £280m £36m £256m £147m Total revenue : £445m Total
Slide 5: Stronger and broader LA capability
Stronger and broader LA capability LA capability Kier May Gurney Combined Environmental Highways maintenance - Housing maintenance - FM services - Fleet Majority of combined Services revenues and order book is with LAs • Increased scale enhances ability to win and d
Slide 6: Significant additional geographic coverage
Significant additional geographic coverage • Local Authority footprint Northamptonshire: £42m p.a. Kier: • Waste Collection Kier: 43 LAs • Recycling • Grounds Maintenance • Street Cleansing • Social Housing Planned Maintenance May Gurney: 30 LAs May Gurney: • Highways Maintenance The Enlarged
Slide 7: LA urban street scene capability
LA urban street scene capability Housing maintenance Energy management New build FM Lighting Planned upgrades New build Road maintenance Grounds maintenance Property asset management Underground services Regeneration Fleet management Recycling / AD Refuse collection Street cleaning 7
Slide 8: Enhanced Regulated Services capability
Enhanced Regulated Services capability Regulated Services capability Kier May Gurney Combined Utilities Power & Industrial - Rail Waterways - Rail Utilities New build Power - capex Signalling Gas Station refurbishment Power - opex Structures refurbishment Telecoms Water -
Slide 9: Combined Group order book
Combined Group order book Combined order book1 Combined order book1 Kier Construction Kier Construction Revenues Kier Services Kier Services May Gurney Services £3000m May Gurney Services £2500m £1.5bn £2000m £2.1bn £1500m £1000m £500m £2.1bn £0m 2014 2015 2016+ Total order book : £5.7bn 1 Based on
Slide 10: Combined Services order book longevity
Combined Services order book longevity • £3.6bn confirmed order book Revenues • £2.5bn potential contract extensions £900m Enlarged Services Order Book Enlarged Services Potential Extensions £800m £700m £600m £500m £400m £300m £200m £100m £0m 2014 2015 2016 2017 2018 2019 2020 2021 2022 Source: Base
Slide 11: Transaction terms
Transaction terms • Each May Gurney shareholder to receive: For each May Gurney share: 265p in new Kier shares; and 50p in cash May Gurney shareholders will also receive a 5.6p dividend • The consideration under the terms of the Proposal (excluding the 5.6p dividend) represents a value of: 315
Slide 12: Cost Synergies
Cost Synergies Expect recurring pre-tax cost synergies of £20m p.a. Pre-tax run rate cost synergies by category1 £20.0m Targeted synergy phasing: £20.0m £5m to be realised for the y/e June 2014 £18.0m 20.5% Procurement £4.1m £15m to be realised for the y/e June 2015 £16.0m £20m to be reali
Slide 13: Integration plan
Integration plan • Comprehensive integration plan • Clarity of acquisition structure and leadership • Key areas identified • Integration schedule designed to realise majority of synergies by June 2015 • Anticipate net reduction of approx. 200 employees across the Enlarged Group • The acquisition of
Slide 14: Combined Group capital structure
Combined Group capital structure • Banking facilities of £480m • Terms consistent with existing Kier facilities • Kier net cash of £4m (incl. £8m finance leases) as at December 2012; May Gurney net debt of £77m (incl. £74m finance leases) as at September 2012 • Comfortable net debt position • Integr
Slide 15: Lending Facilities
Lending Facilities Facility type Kier May Gurney Status re Combined Group May Gurney (£m) (£m) arrangements (£m) Existing: RCF 120 23 replace 120 Overdraft 20 25 broadly retain 40 FLS loan 30 30 USPP 63 63 Leasing 15 92 retain 107 New: RCF 701 Term loan 501 Total 248 140 480 1 To September 2016 15
Slide 16: Expected timetable
Expected timetable • Rule 2.7 announcement 24 April 2013 • Publication of Prospectus / Class 1 Circular (Kier) Early - Mid May 2013 • Publication of Scheme Document (May Gurney) Mid May 2013 • May Gurney Court and shareholder meetings Mid June 2013 • Kier shareholder meeting Mid June 2013 • Completi
Slide 17: Summary
Summary • Creates one of the UK’s leading integrated services and construction Groups • Significant increase in the scale of Kier’s Services business • Excellent access to Local Authorities • Substantial cost synergies anticipated to benefit both sets of shareholders • Strong cultural alignment betw
Slide 18: Q&A Recommended acquisition of May Gurney Integrated Services plc
Q&A Recommended acquisition of May Gurney Integrated Services plc 18
Slide 19: Disclaimer
Disclaimer This presentation (the “Presentation”) has been prepared solely for use in connection with the offer (the “Offer”) by Kier Group plc (“Kier”) for May Gurney Integrated Services PLC (“May Gurney”). By attending or receiving this Presentation, you agree to be bound by the conditions set out