Atkins agrees a deal to sell its UK Highways Services business to Skanska UK

Atkins manages 24,000km of roads across the UK. Its UK Highways Services business employs some 1,200 people at 55 locations and has annual revenues of approximately £160m.

Skanska has agreed to pay Atkins £16m on completion of the deal, set for 31 May 2013, with the remaining £2m deferred subject to the future performance of the business.

The acquisition will double the size of Skanska UK’s infrastructure services operating unit to 1,600 employees, making it one of the biggest in the UK business. It will also increase the size of Skanska’s UK workforce by 25%.

Skanska said that it would now have an 8% share of the £2.4bn highways maintenance market in the UK.

The ties between Atkins and Skanska run deep. Atkins recruited its former chief executive Keith Clarke from Skanska UK. And the two companies work in joint venture on Highways Agency asset support contracts.

Their asset support contract Area 2 covers Wiltshire, Gloucestershire, Dorset and Somerset; asset support contract Area 6 covers Norfolk, Suffolk and Essex.

Skanska is taking over six local authority contracts from Atkins, subject to client agreement, and two Highways Agency ones. From 2014 the anticipated annual revenue of these contracts is £200m. Skanska is now talking to the local authorities about the novation of maintenance contracts from Atkins to Skanska. The Highways Agency has already given its approval.

Though traditionally a consulting engineer, Atkins expanded into contracting services after its stock market flotation in the 1990s. It seems it now wishes to return a little closer to its roots.

Atkins chief executive Uwe Krueger, who was appointed on Keith Clarke’s retirement in 2011, said:  “The sale of UK Highways Services, which forms part of our UK Highways and Transportation business, is a step forward in the implementation of our strategy which includes work to optimise our portfolio of businesses.

“We wish to focus on growth sectors in engineering, design services and project management.  We believe Skanska is a more appropriate owner for this business and will enable it to continue to flourish and grow.”

Skanska said that the acquisition was in line with its strategy of increasing its presence in the UK and building up its UK highways business.

Skanska UK president and CEO Mike Putnam said: “I am happy to be able to welcome this business to the Skanska family. We already work with Atkins on a number of projects, so I know this is a good fit, business-wise as well as culturally. It also strengthens Skanska’s presence in the regions where we are acquiring contracts and in the UK highways market in general.”

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