Balfour raises 380m to buy rival US firm
CONSTRUCTION firm Balfour Beatty yesterday said it has agreed to buy US project management firm Parsons Brinckerhoff for $626m (£380m), in a deal partly funded by a surprise rights issue.
The group said it was launching a fully underwritten £353m cash call to fund the acquisition, which it believes will give it a leading position in the US market.
Balfour Beatty, which last month reported a 14 per cent rise in pre-tax profits to £108m, said the three-for-seven issue of 205.5 new shares would be priced at 180p, a 46.8 per cent discount to Wednesday’s closing price.
The rights issue is fully underwritten by banks RBS Hoare Govett, JP Morgan and Citigroup.
Balfour Beatty said the takeover will enhance the group’s long-term growth potential and will strengthen its presence “across the entire life cycle of major infrastructure assets”.
Balfour chief executive Ian Tyler said: “It is a key step in becoming a global integrated leader in infrastructure services.”
Balfour, which has spent around £1bn on acquisitions since 2007, said it derived around 30 per cent of its business from the US
In the year ending 31 October 2008, Parsons Brinckerhoff posted operational profits of $107m.
The deal will mean a significant pay off for Parsons’ 12,650 employees, who own the company.