Scots building giant Miller Group has sold its construction arm to rival Galliford Try for almost £16.6million.
Philip Bowman, chairman of the privately-owned firm, said the sale of would allow it to focus on housebuilding and commercial property.
Galliford Try – owner of Scottish firm Morrison – is paying £16.57m for Miller Construction, which recently built Union Square in Aberdeen.
The deal will see Galliford’s order book double to £2.8billion, but will lead to one-off restructuring costs of £4million as the group seeks to squeeze out annual cost savings of £7million.
Chief executive Greg Fitzgerald said: “We are delighted to announce the acquisition of Miller Construction, achieved at a very good price and with no net cash consideration.
“The acquisition brings together two construction businesses with a strong strategic fit and accelerates our strategy of growth into an improving marketplace.”
Mr Bowman added: “The acquisition of Miller Construction by Galliford Try will provide it with a strong base from which to grow its competitive position and continue to serve its clients.”
Galliford Try said the “tactical acquisition” of Miller Construction, which generated revenues of £409million last year, is consistent with its strategy of “disciplined and selective growth in its construction business, with a particular focus on developing our positions on regional and national frameworks”.
A spokesman added: “The transaction accelerates the growth in construction turnover towards £1.25billion, and increases the 2018 target to circa £1.5billion.
“The acquired order book of £1.4billion doubles the group’s order book to £2.8billion.
“The directors believe that the acquisition price of £16.57million represents a very attractive valuation for Galliford Try.”
Galliford Try is one of three companies picked to build the long-awaited Aberdeen Western Peripheral Route
In a trading update on Wednesday, the firm said the deal would help it towards a record £95.2million this year.