Siteserv, the building services group, is set to buy power cable business, Sierra Communications, in a deal worth up to €52 million. Barry O'Halloranreports.
Siteserv, which floated on the Dublin and London markets last year, said yesterday that it has agreed to buy Sierra in a combined cash and shares deal.
The company will initially pay €46 million when the transaction is completed. It has agreed to pay up to €6 million more over the next three years, based on Sierra's performance and profitability growth.
Sierra's founder, Desmond Whyte, and executives, managing director Kevin Hoctor, operations director Elliott Whyte, field operations director TJ Malone and finance director Stephen Quinlan, will be the beneficiaries of the sale. All plan to remain with the company.
They will receive €41.4 million of the initial price in cash and also become Siteserv shareholders. The remaining €4.6 million will be paid through the issue to them of 7.77 million Siteserv shares at 59 cent, the average price over the last 30 business days.
Those shares were worth over €6 million last night as Siteserv closed at 78 cent. Under the terms of the deal, the five men will not be able to sell these shares for a year. Sierra specialises in supplying and laying power and communications cables. Siteserv chief executive Brian Harvey said Sierra is a market leader in this business.
