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Costain has strengthened its engineering programme management capability with the acquisition of Coventry-based consulting engineer Rhead Group for £36m.

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Rhead describes itself as a professional services consultancy with a focus on programme and commercial management. It was established in 1985 and has more than 550 staff. Clietns include National Grid,Wales & West Utilities and BAE Systems.

Rhead's senior management team, including CEO Nigel Curry, will remain with the business.

In the year to 31st July 2014, Rhead Group generated revenues of £63.5m and EBITDA of £5.2m (before exceptional administrative expenses of £700,000). It made a pre-tax loss of £1.2m including interest on loan notes under its former capital structure.

Costain has paid £36m for the business from its existing cash and debt facilities, with £26m going to funds managed by Inflexion Private Equity Partners LLP and £10m to the senior management team.

Rhead managers get £7m now plus £1.5m on 17th August 2016 and another £1.5m on 17th August 2017.

Rhead Group will join Costain's Power business and report into the Natural Resources division.

At the same time, Costain said it was taking the opportunity to combine all of its Nuclear activities into one unit that will report into its Infrastructure division.

Chief executive Andrew Wyllie said: "We are delighted to announce the acquisition of Rhead Group which has a well-established reputation for its collaborative approach, focus on innovation and service delivery excellence. This transaction accelerates the development of Costain and further broadens our range of capabilities to meet the requirements of major blue chip customers, providing greater ability to deliver integrated solutions across the full lifecycle of a project."

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