The planned acquisition of digital infrastructure firm Telent by M Group requires approval on competition and national security grounds, it has emerged.
Both firms have shared clients – including Transport for London, National Highways and Network Rail – which means the acquisition is expected to need Competition and Markets Authority approval.
Telent was among Highways England’s top 20 contractors in 2023/24, having been awarded £65.3m worth of work by the public body.
In a statement yesterday (16 April), M Group chief executive Andrew Findlay described the planned tie-up as a “hugely transformative deal”. But it will also require national security and investment clearance in both the UK and Ireland, an M Group spokesperson told Construction News.
“We will work closely with the regulatory bodies to complete this process in a timely way,” they said.
Telent counts the Ministry of Defence among its clients. For example, it has a place on the Serapis military procurement framework, providing networks for command, control, computers, communication, intelligence, surveillance and reconnaissance (C4ISR).
The government invoked the National Security and Investment Act in January when it decided to probe the takeover of Lendlease’s UK construction business (now Bovis) by US private equity firm Atlas Holdings. That deal was eventually completed last month.
Also in March, Sky News reported a £270m price tag to buy Telent.
But M Group, which rebranded from M Group Services earlier this month, declined to comment on this figure when asked by CN.
If regulators approve the planned transaction, it will be M Group’s 22nd acquisition since 2016. The latest announcement follows a deal to acquire Suffolk-based Aran Group, revealed last Thursday.
The spokesperson said M Group has “ambitious plans to grow including through mergers and acquisitions”.
M Group itself was acquired by Luxembourg-based private equity firm CVC Capital Partners last June.
Its most recent accounts for the year to 31 March 2024 showed revenue of £2.2bn and a pre-tax profit of £23.9m.
The firm was ranked as the 10th-largest UK contractor by turnover in the CN100 2024 table.
Telent generated a pre-tax profit of £20.2m from turnover of £461.5m in its most recent accounts to 31 March last year. It employed a monthly average of 2,461 staff.
The firm was founded in 2006 when it emerged from the ashes of collapsed electronics giant Marconi.
CN was told that Telent chief executive and co-founder Jo Gretton will step down three months after the deal is completed.
She will “proactively support with transition planning”, the M Group spokesperson said.
Chief financial officer Gillian Bonthron and HR director Jemimah Parnell are also leaving Telent.