Speedy Hire nails OHP takeover

Speedy Hire nails OHP takeover

Tool rental firm Speedy Hire said it had agreed to buy rival OHP, as it seeks to expand its presence in the rail market.

Merseyside-based Speedy Hire said it would buy OHP, based in Crewe, for an initial fee of £1.5m, and take on around £1.7m in debt.

OHP employs a team of 25 and also comprises Rail Hire UK, which offers overhead line equipment for hire in the rail sector. Shares lifted 6%.

The move comes after two of the largest firms in the industry, Speedy Hire and rival HSS, scrapped plans for a £300m merger after talks broke up in November.

Both firms have been hit by a slowdown in housing and construction markets, leading to profit warnings and job cuts.

Speedy hire said sales at OHP for the year to the end of November 30 stood at £2.6m compared to 12 months before, while earnings came in at £800,000.

It said the acquisition is expected to be boost earnings within the next year, adding that the cost of the purchase could rise up to a further £800,000, depending on the future performance of OHP.

Speedy Hire chief executive Russell Down said: "I am delighted to announce this acquisition which will help expand our business in this specialist sector of a growing UK rail market and further enhance our market position."

In September Speedy Hire said it would cut 200 of the 3,200 staff it employs in the UK, as the firm struggled to turn around falling sales.

The firm, valued at around £200m, issued two profits warning in three months last year, and said it expected revenues at its core hire unit would be around 10% below last year.