Balfor Beatty selling Parsons Brinckerhoff to WSP Global

1146 Balfour Beatty is selling its 2693 Parsons Brinckerhoff business to 2782 WSP Global for US$1.3525 billion (£820 million). Part of the agreement is that $110 million (£67 million) being retained within Parsons Brinckerhoff. With the acquisition of Parsons Brinckerhoff, WSP becomes one of the world’s largest professional services firms. The deal increases WSP’s presence across global emerging markets in Asia and Australasia as well as providing opportunities in the UK market, where Parsons Brinckerhoff is well-established.

Once the transaction has been completed, the proceeds are intended will be used first to settle transaction taxes, fees and other transactional costs of around $80.8 million (£50 million), together with certain separation-related costs of approximately $48.5 million (£30 million). After this some $323.2 million (£200 million) will be returned to shareholders and around $137.35 million (£85 million) will be used to reduce the Group’s pension fund deficit. Balfour Beatty says that the balance will be retained to ensure a strong balance sheet and provide increased financial flexibility.

Following the sale, and the recent revaluation of the PPP portfolio, Balfour Beatty says that its key strategic priorities will be to restore the value of the UK construction business, including progressively returning it to peer group margins It will continue to build on the good performance of the investments and services businesses and leverage growth opportunities in US buildings, US civils, rail and power, and the Group’s Far East and Middle East Joint Ventures. It will also realise further indirect overhead savings and shared service efficiencies across the Group and continue to assess all other value creation opportunities. Looking further ahead Balfour Beatty will reposition itself as an Anglo-American infrastructure group focused on construction, services and investments.