Engineering group Amec (LON:AMEC) has moved to bolster its Earth & Environmental division by agreeing a deal to acquire US engineering and environmental services company MACTEC for US$280 million. E&E’s 170-strong branch network is heavily focused in North America, with a particularly strong presence in the Western US and in Canada. More recently, the division has also worked on expanding its presence in the growth markets of Europe and South America. By contrast, MACTEC’s 70 offices are mainly located in the eastern part of the US. As a result, the combination allows AMEC greater access to new customers and regions and MACTEC a better international platform for growth. The AMEC share price responded with a 17p rise to 1178p during the morning.

Headquartered in Georgia, MACTEC employs around 2,600 staff, most of which are highly skilled technical professionals. The company provides a similar wide range of services to the E&E business, including environmental planning, assessment and remediation, infrastructure engineering, water resources and construction support services. It has a broad range of high-quality, long-term clients operating in the energy, commercial/industrial, transportation/infrastructure and federal sectors. The company is being acquired for cash from its private equity and other individual shareholders. Completion is subject to regulatory approval and is expected by the end of June 2011.

Neil Bruce, AMEC’s chief operating officer, said: “MACTEC and E&E are highly complementary businesses, in terms of geographic footprint, customer base and service offering. The combination will provide great opportunities to grow our position with existing clients and attract new ones, through our proven life-of asset expertise and scale. The growth drivers in our markets are strong and we will now be better placed to take advantage of them.”

At 31 December 2010, MACTEC's gross assets were US$283 million and its earnings before interest and tax in 2010 were US$32 million. The business will be integrated into AMEC during 2011. It is expected to be earnings enhancing immediately and to achieve its weighted average cost of capital by the second full year. Ann Massey, the president and chief executive of MACTEC, and her management team are expected to remain with the combined group.

In 2010, AMEC’s E&E business delivered a 26% increase in revenues to £592.6 million – contributing towards the group’s overall revenue total of £2.95bn, which was up 16%. Organic growth was led by…

Unlock the rest of this article with a 14 day trial

Already have an account?
Login here