Ferrovial sells UK support services business Amey in £400mn deal

Ferrovial, the Spanish infrastructure group that is a part owner of Heathrow airport, has agreed to sell its UK services business Amey to buyout groups One Equity Partners and Buckthorn Partners in a £400mn deal.

The Spanish group has been seeking to sell Amey — whose services for the UK government range from maintenance for the Ministry of Defence to transporting prisoners for the Ministry of Justice — for several years.

However, progress on a sale was stymied by Amey’s long-running legal dispute with Birmingham council over a £2.7bn deal to maintain the city’s road network. The dispute has now been resolved.

“It’s been on the market for five years,” said Stephen Rawlinson, analyst at Applied Value. “Because they [Amey] had quite a number of troubled contracts.” 

The sale to the buyout firms was “part of a wider trend of highway and utilities services being sold to private equity, but there is money to be made in that space”, he added.

The deal values Amey’s equity at about £245mn, Madrid-based Ferrovial said in a statement on Tuesday. Ferrovial’s shares, which have fallen 16 per cent this year, rose 1 per cent in early afternoon trading.

For Ferrovial, the disposal of Amey is part of its so-called Horizon 24 plan, which seeks to prioritise infrastructure development, construction and management alongside its water business and those areas focused on the transition from fossil fuels.

“This transaction represents a step forward in our Horizon 24 business plan,” said Ferrovial chief executive Ignacio Madridejos. “The deal practically concludes the divestment of the services business.”

In 2019, Ferrovial took a €774mn writedown on Amey, marking it out as the most troubled part of the Spanish group’s portfolio. The sale excludes Amey’s waste treatment business, which Ferrovial is keeping.

Announcing the acquisition, Ante Kusurin, a principal at One Equity Partners, said that “Amey is a well-regarded, longstanding player in the critical infrastructure design and management space in the UK”, adding that it would have more opportunities as an “independent company”. 

Buckthorn Partners is chaired by Lord Colin Moynihan, a former minister in Margaret Thatcher’s government. Lord Philip Hammond, who was chancellor during Theresa May’s government, is a partner at the firm.

Nicholas Gee, founding partner at Buckthorn Partners, said: “Amey is at the heart of developing innovative routes to delivering the UK’s infrastructure needs.” 

The acquisition of Amey is expected to close this year and is subject to regulatory clearances.