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Keller Buys Geotechnical Specialist Recon

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Keller Group, the world’s largest geotechnical specialist contractor, has paid $23m for Houston-based RECON Services, a geotechnical and industrial services company.

RECON is a specialist geotechnical environmental remediation and industrial services contractor working principally for industrial clients, many in the petrochemical sector, predominantly along the Gulf and East coasts of the US. Its geotechnical work is focused mainly on the environmental remediation and solidification of soils, while its industrial services activities support the specialized needs of the power, mining and manufacturing industries.

The acquisition of RECON is in line with the Group’s strategy to be the preferred international geotechnical specialist contractor focused on sustainable markets and attractive projects. Similar to Keller’s existing Florida based Moretrench Industrial business, RECON is focused on environmental remediation activities and 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, and some, primarily volume based, cost synergies.

The additional revenue synergies provide the opportunity to increase the Group’s overall market share in the important Gulf Coast area where Keller has historically been relatively under-represented. RECON will report to John Carpenter, president of Moretrench Industrial, and be integrated into Keller’s North America Division.

RECON has been acquired from funds managed by Oaktree Capital Management for $23m on a cash and debt free basis, plus an earn-out consideration relating to certain future contract wins up to 31 December 2022, which is currently estimated to be around $15m, payable at time of project mobilization. The acquisition will be funded from Keller’s existing borrowing facilities.

Keller said it expected the acquisition to be earnings accretive in the first full year of ownership as RECON’s revenue begins to return to more normal levels of activity and as the operational benefits of integrating the business develop, with the additional potential for new contract awards given the significant pipeline of new projects projected by the petrochemical sector in the region.

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