Serco Group plc (Serco), the international service company, has completed the sale of its London streets maintenance and UK transport technology business to Cubic Corporation for an enterprise value of £43.5m. The transaction is in line with Serco's proactive portfolio management involving an ongoing assessment of operations against their fit to our strategy.
The disposed business provides maintenance for transport infrastructure such as traffic signals and CCTV systems in London as well as the design, installation and maintenance of UK transportation management technology. Under Serco's continued ownership, future growth and profitability were expected to be restricted due to limited synergies with our core UK transport portfolio of operating public transport networks.
For the year to 31 December 2012, the financial result of the business was approximately £42m of revenue and £8m of Adjusted operating profit. The provisional value of net assets being disposed of, subject to a working capital adjustment to finalise the cash consideration as set forth in the purchase agreement, is approximately £16m. After disposal-related costs, the exceptional accounting profit on disposal is expected to be approximately £24m.
Ed Casey, Acting Group CEO, said: "In the UK, these particular maintenance and technology operations had become non-core to the future development of our transportation strategy. We remain committed to serving and developing our core transportation operations in the UK and around the world in areas such as light and heavy rail, ferry services and cycle hire. In the Americas and AMEAA regions we will also continue to develop opportunities in transportation management and operations, building upon our 2013 contract awards with the Virginia Department of Transport and our further expansion of services in Hong Kong."