Ground engineering group Keller has bought Australia's second largest specialist foundations contractor, Piling Contractors, for up to #10.8 million.

Keller - which employs around 200 in its ground engineering wing at Ryton, Coventry - will pay an initial #9.6 million net of acquired cash, the company said.

It also said there would be additional earn-out of up to #1.2 million based on future profits.

Justin Atkinson, chief executive, said: "Piling Contractors is a much respected and growing contractor and we are delighted that its skills and expertise will now be available.

"This is one more step forward in our strategy of further consolidation of our global leadership in specialist ground engineering, through a combination of organic growth and acquisitions."

Broker Dresdner Kleinwort argued the deal was strategically sound as Keller's business in Australia had been mainly commercially focused, doing little business with public bodies, while Piling had a strong presence in civil engineering, infrastructure and mining.

It added while both groups' businesses in Australia have a similar geographic coverage, the deal should lead to synergies as the companies combine.

Dresdner Kleinwort - which reiterated its "buy" recommendation - also noted the acquisition increases Keller's exposure to the "attractive" and "buoyant" Australian market.

It said: "The acquisition of Piling Contractors further consolidates Keller's position as the leading independent foundations contractor. As well as a good strategic move it will be earnings enhancing."