ECONOMIC development firm Enterprise has agreed the terms of a merger with the utilities company ARM.

Enterprise has recently been through a troubled period with a poor performance in the second half of the last financial year.

Enterprise, formerly Lancashire Enterprises Ltd, is heavily involved in projects across East Lancashire including the Technology Management Centres in Blackburn and Accrington.

The aim of the merger is to combine ARM Group's reputation and experience in utility services with the brand and reputation of Enterprise in the public sector to create a major management and consultancy services business.

Michael Hynes, chief executive of Preston-based Enterprise, said: "We are delighted to announce the merger with ARM. We have known the management of ARM for some time and have been impressed by the growth in the business that they have achieved.

"We welcome the management strength and operational skills that the merger will bring to Enterprise, together with the opportunity it provides to extend our business and consolidate our position as a provider of management and consultancy services."

Enterprise's interim results for the six months ending April 30 this year show a particularly poor performance in the second half of the last financial year, during which pre-tax profit was £1.17million on turnover of £12.91 million.

Pre-tax profits for the six months ended April 30 2000 were £1.24 million on turnover of £10.63 million.