THE Newton-le-Willows-based firm, Speedy Hire, has signed a five-year deal with the Middle East and North Africa joint venture of builder Carillion, Al Futtain Carillion (AFM).

It follows the signing of a memorandum of understanding last July between the two companies.

The strategic services agreement means plant and tool hire specialist Speedy will, in addition to becoming AFC’s exclusive provider of light plant and equipment across the Middle East and North Africa regions, provide a full range of asset management and logistical services using its new IT and business process platforms.

Speedy Hire is investing a total of £8.5m in the deal, including the purchase of certain light plant and other assets from AFC for £4.1m.

The balance comprises the cost of transferring equipment from the UK to the Middle East and North Africa.

Formal completion of the deal is expected to take place later this month, and Speedy Hire chief executive Steve Corcoran said: “We are delighted to announce this further development of our strategic relationship with Carillion.

“This underlines the long-term value of our strategy of deepening our relationships with leading international contractors and industrial clients and highlights Speedy’s rapid progress in becoming an international services business.”

John McDonough, Carillion’s chief executive, added: “Building long-term relationships with our key suppliers is important to our ability to deliver increasingly efficient, high-quality services for our customers.

“We look forward to working with Speedy in the Middle East and to building on the strong relationship we have already developed with Speedy in the UK.”

Speedy Hire has been hit by the downturn in construction as a result of the credit crunch, and is seeking to diversify by striking partnership with key clients.

In late November last year, the company announced a 28% drop in interim revenues of £184.8m for the six months to September 30.

After restructuring costs of £6m it made a pre-tax loss of £13.6m compared with a £19.4m profit last time.

But it said it was well placed for an upturn after using a £99.7m rights issue to cut debts by 45.7% to £134.8m.

Since the recession hit, 7% of staff have been axed and cost savings of £80m identified. Speedy expects to break even at adjusted profit before tax level in the second half.