Former Chancellor Hammond in exclusive talks to buy £200m contractor Amey | Economic news

Lord Hammond, the former Chancellor, has moved into pole position to acquire Amey, one of Britain’s biggest outsourcing groups, after the firm where he works as a partner was granted an exclusivity period to finalize a deal worth over £200m.

Sky News has learned that Buckthorn Partners, a private investment firm which the Tory peer joined in 2020, has teamed up with One Equity Partners, a US-based private equity firm, to seal the takeover of Amey.

Industry sources said the Amey sale, which has been in the works for at least nine months, could close within weeks.

The company, plagued by a series of contractual and financial difficulties, was put up for sale a second time last year by its Spanish parent company, infrastructure giant Ferrovial.

He previously halted an auction process that began in 2018.

A takeover by Buckthorn and One Equity would see one of the UK’s largest private sector employers change hands.

Amey, which ranks among the government’s top private sector contractors, employs about 15,000 people.

Among the public sector activities it refers to on its website are maintaining Britain’s defense estate, keeping 60 prisons ‘safe and compliant’ during the COVID-19 pandemic and developing the feeding program for the HS2 high-speed rail link.

In its letter to Lord Hammond about his appointment as a partner at Buckthorn, the Advisory Board for Professional Appointments (ACOBA) in Whitehall prohibited him from undertaking “any work as a partner which involves providing advice to any business organization on the terms of or relating to the subject of a tender or contract directly relating to UK Government work”.

Former Chancellor Philip Hammond

The ban was imposed by ACOBA for two years from the former chancellor’s last day in ministerial office, meaning it expired in July last year.

Buckthorn describes itself as a private investment firm primarily focused on acquiring assets in the energy sector.

Its portfolio includes Ashtead Technology, which makes advanced underwater tools, and Paradigm Energy Ventures, which it owns alongside a branch of Saudi Aramco.

As well as Lord Hammond, the Buckthorn partnership includes Lord Colin Moynihan, who served as Sports Minister under Margaret Thatcher.

Both men were university contemporaries and Lord Hammond chaired the Conservative Constituency Association of Lord Moynihan when the latter was an MP in the 1980s.

Lord Hammond was MP for Runnymede and Weybridge for more than two decades before losing party whip when he went against government policy by voting against Britain leaving the European Union without a deal.

He spent nearly a decade in Cabinet, including as Chancellor, Foreign Secretary and Defense Secretary.

Since leaving politics, he has accumulated an array of board and advisory positions, including in the fintech, transportation and real estate sectors.

Ferrovial, which owns a large part of London Heathrow Airport, has for some time considered selling its entire global services business.

The initial attempt to sell Amey to the UK failed amid uncertainty over the future of a controversial £2.7billion road contract in Birmingham.

A dispute with the city’s local authority was resolved in 2019, although Amey only finally pulled out of the deal last year.

Tidying up Amey’s business is likely to provide potential buyers with a clearer view of the company’s valuation in an industry that has been rocked by several major corporate collapses in recent years, including that of Carillion and Interserve.

Morgan Stanley is managing the auction for Amey, who declined to comment Monday.

Neither Buckthorn nor One Equity responded to a request for comment.

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