Balfour Beatty sells Parsons Brinckerhoff for GB820m
Freed from its merger negotiations with Carillion, Balfour Beatty has announced the sale of its professional services division Parsons Princkerhoff to WSP Global Inc. for US$1,352.5 million (£820 million).
The sale price assumes cash of US$110 million (£67 million) is retained within Parsons Brinckerhoff. The deal is subject to approval by Balfour Beatty shareholders, antitrust and other approvals, and is expected to be concluded in Q4 2014.
Upon completion of the sale, the remaining cash proceeds after deductions are to be used in three ways. First, up to £200 million will be returned to shareholders; approximately £85 million will be used to reduce the Group’s pension fund deficit; and the remainder will be retained by the Group to ensure a strong balance sheet and provide increased financial flexibility.
Balfour said the competitive sale process demonstrated the value of the Parsons Brinckerhoff business within a rapidly consolidating global professional services sector.
After completing the deal, and the recent revaluation of the PPP portfolio, the Balfour summed up its key strategic priorities as: restoring the value of the UK construction business, including progressively returning it to peer group margins; continuing to build on the good performance of the investments and services businesses; leveraging the growth opportunities in US buildings, US civils, rail and power, and the Group’s Far East and Middle East Joint Ventures; realising further indirect overhead savings and shared service efficiencies across the Group; and continuing to assess all other value creation opportunities.
Balfour Beatty will be repositioned as an Anglo-American infrastructure group focused on construction, services and investments, comprising top tier national and regional construction businesses in the UK and US; a leading international investments business; a services division with a number of specialist construction and asset management businesses; and successful construction joint ventures in the Far East and Middle East.
Steve Marshall, Executive Chairman of Balfour Beatty said: “The Board believes that the sale price of £820 million delivers both a significant return on our original investment and a compelling level of value creation for shareholders - which remains the key focus of the Board.
“The sale of Parsons Brinckerhoff follows the recent revaluation of our investments portfolio, which underlines the potential of this division to create value internally and across the Group. In the US, our core construction business is well positioned in a recovering market. In the UK we see the potential for margins to progressively recover to peer group levels. Our services business, meanwhile, is well placed to benefit from the growing investment in infrastructure. Together, these elements will provide a strong foundation for an incoming Group CEO to take the company forward."
Goldman Sachs International acted as lead financial adviser to Balfour Beatty. BofA Merrill Lynch also provided financial advice in relation to the transaction.
The sale had been a sticking point in the failed negotiations with Carillion over a merger, with Balfour wishing to complete a deal while Carillion wished to retain the US-based services company as part of the new combined entity.
uPVC pipes, safety glasses and Spetz app launched
This week has seen a range of new product and service launches for the construction trade.
Vinyl Pipes has launched uPVC Column Pipes, which extend the life of pipes. Column Pipes with a power lock (patent pending) will not only to raise the safety standards but improve the efficiency of Borewell installations. This Lock system, a by-product of the in-house R&D team, is designed to bear load making the pipes stress-free, torque resistant and perfect for handling high pressure water.
Conscious that using the correct glasses could prevent 90% of jobsite injuries, Milwaukee's expanded range (pictured) features anti-scratch and fog free styles, new lens colours and magnification features, complementing its 'cut resistant' gloves.
Arriving on the UK app scene, Spetz is billed as a ‘one-stop shop’ for anyone "panicked by household flooding or electricity failure," as it unites tradespeople with consumers.
Spetz founder and CEO Yossi Nevo said urgent needs come in all forms and it’s unlikely that any household has tried and trusted tradespeople to match every possibility.
"The Spetz app rapidly connects them with a suitable ‘rescue service’ in as little as 30 seconds and that rapid reassurance is completely free - it’s the tradespeople who pay for these job leads. Those start at around £6 a time, but the tradesperson can then go on to make thousands from our automated system funnelling the best and most appropriate work their way.”
Spetz is now three years old operating in Israel, Australia and is now beginning a full UK rollout, after a ‘soft’ launch.