Carillion will acquire Eaga for £306.5 M

LONDON - Support services company Carillion PLC (CLLN.LN) will acquire Eaga PLC (EAGA.LN), a provider of residential energy efficiency solutions in the U.K., for GBP306.5 million, the companies said Friday.

The deal will create a business with combined support services revenue of about GBP3 billion and gives Carillion a strong presence in the U.K. energy services market.

Eaga provides Carillion with an established presence across a wide range of energy services markets and offers growth prospects from the British government's strategy to encourage a low carbon economy, and in the sphere of renewable energy, where it is focused on the feed-in tariff regime for small-scale residential solar photovoltaic installations.

Carillion, which also offers construction and infrastructure services, expects to generate synergies of GBP9 million by the end of 2013 with one-off costs of delivering those savings in the region of GBP15 million. These synergies are expected to be generated through improved efficiencies across both the Carillion and Eaga businesses.

Carillion's offer for Eaga is valued at 120 pence a share, representing 118.79 pence in cash plus the 1.21 pence interim dividend that Eaga shareholders are due to receive March 18.

The offer represents a premium of 50% to Eaga's closing price of 80 pence Feb. 2, the last business day prior to the disclosure that Eaga was in talks that might lead to an offer, and a premium of 30% to its closing price of 92 pence Thursday.

The deal is subject to approval by Eaga's shareholders but is expected to become effective in April.

"The offer received from Carillion has come at an interesting time in Eaga's development, as our markets are changing rapidly," said Eaga Chairman Charles Berry in a statement. "While there are exciting future prospects, we believe these are potentially better accessed as part of a larger group."

Carillion's shares closed Thursday at 385 pence. They have gained 36% in value in the past 12 months.