04.09.14
Balfour Beatty confirms sale of Parsons Brinckerhoff for £820m
Balfour Beatty has announced the sale of its professional services division, Parsons Brinckerhoff, to WSP Global Inc for £820m.
Merger talks between Balfour Beatty and Carillion plc recently collapsed in part due to complications and disagreements about the proposed sale of PB.
After taxes, fees and other deductions of about £50m, together with certain separation-related costs of about £30m, Balfour Beatty plans to return up to £200m to shareholders. Another £85m is expected to be used to reduce the group's pension fund deficit.
The sale, conditional upon approval of Balfour Beatty shareholders, is expected to be completed in the fourth quarter of 2014. The balance will be retained by the group “to ensure a strong balance sheet and provide increased financial flexibility”.
Steve Marshall, executive chair of Balfour Beatty, said: “The board believes that the sale price of £820m 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."
Balfour Beatty is now turning its attention to restoring the value of the UK construction business, including returning it to peer-group profit margins.