May Gurney braves markets with £130m float

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The construction services company May Gurney has raised more than £44m from City institutions as part of a flotation plan that values it at £130m. It is a striking turnaround for a company that was taken private through a management buyout in 2001 in a deal worth only £20m.

Since then, the Norfolk-based May Gurney has transformed itself into a construction services and maintenance company from a regional construction player. It provides maintenance and support services for roads, railways, utilities and general infrastructure.

David Sterry, the chief executive since 1999, said the company decided to list its shares to raise the profile of May Gurney and increase its chances of winning larger contracts. He said the company would continue to look for acquisition opportunities to strengthen its core businesses and to expand into new regions.

May Gurney will retain about £13.5m of the funds raised through the listing, with the remainder being distributed to the group's 500 shareholders - current and former employees.

May Gurney's board and directors will control a stake of about 40 per cent once the shares are listed, with a one-year lock-in period. Mr Sterry will be worth about £15m as a result of the flotation with the rest of the board and senior directors worth a further £25m. The company's shares will start trading on the Alternative Investment Market on Wednesday at 186p a share. The placing was nearly two times oversubscribed despite recent stock market turbulence.

May Gurney was founded in 1926 as a water and sewerage company before expanding into other civil engineering projects such as road building.

In the year to 31 March 2006, the company reported 20 per cent growth in revenue to £365m and an order book in excess of £1bn. It achieved its highest-ever pre-tax profit of £16.7m during the year.

Mr Sterry said the company was working with its local authority partners in the area of waste disposal. He said May Gurney was offering project management services but the need for UK waste disposal facilities - as the Government looks to replace landfill sites - could result in more business over the coming years.