Keller buys US geotechnical services provider Recon for up to $38m

Keller said on Wednesday that it has bought Recon Services, a Texas-based geo-technical services provider, for up to $38m (£27.4m).

Recon has been bought from funds managed by private equity firm Oaktree Capital Management for an initial $23m in cash. There is also an earn-out consideration relating to certain future contract wins, which is currently estimated at around $15m.

Keller said the deal is in line with its strategy to be the preferred international geotechnical specialist contractor focused on sustainable markets and attractive projects. It noted that similar to its own existing Florida based Moretrench Industrial business, Recon is focused on environmental remediation activities and said the geographic proximity of the two businesses will provide revenue synergies from cross-selling opportunities, both between the two businesses and also the Keller Foundations businesses. There will also be some, primarily volume-based, cost synergies.

The acquisition is expected to be earnings-accretive in the first full year of ownership.

Chief executive Michael Speakman said: "I am excited by the acquisition of Recon, and by the contribution Recon will make to Keller in the future. Recon’s excellent safety record and strong customer service ethos are very similar to those of Moretrench Industrial, and together they significantly broaden our capability in the growing environmental services sector.

"This timely acquisition is strategically aligned to our objective of increasing Keller's market presence in our chosen local markets, and leveraging the synergy opportunities available as a consequence of being integrated into the Keller Group."