Balfour Beatty confirms Parsons Brinckerhoff sale
By Neill Barston05 September 2014
Balfour Beatty’s is to sell its US-based professional services division, Parsons Brinckerhoff, to WSP Global for UK£820 million (€1.03 billion). The company said in May that it planned to sell the business, following a profit warning.
Completion of the deal is scheduled for later this year and Balfour Beatty said it would help it prioritise on its core construction operations.
It will result in UK£200 million (€252 million) being returned to Balfour Beatty's shareholders. As a result, the move is likely to end any further potential exploration of the company merging with rival firm Carillion - which had insisted Balfour retain Parsons Brinckerhoff as part of any agreement during their failed negotiations this summer.
Steve Marshall, executive chairman of Balfour Beatty, said its construction business in the US was “well-positioned” within the recovering market, which had led to the decision on the American-based Parson’s Brinckerhoff business.
He said, “The board believes the sale price of UK£820 million (€1.03 billion) 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.”
Marshall added, “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 originally acquired Parsons Brinckerhoff in 2009 for US$626 million (€482 million). The ambition at the time was to be able to offer clients the full service of design and consultancy services alongside Balfour Beatty's construction contracting business.