Balfour Beatty PLC
19 May 2004
BALFOUR BEATTY SELLS ANDOVER CONTROLS TO
SCHNEIDER ELECTRIC FOR $403 MILLION
Full value realised in the context of accelerating building control market
consolidation and change
Balfour Beatty, the international engineering, construction and services group,
announces today that it has reached agreement with Schneider Electric, the
French power and control group, for the sale of Andover Controls of the US for a
total consideration of $403 million. It is anticipated that the transaction
will be completed by the end of July following the receipt of regulatory
approvals.
Andover Controls designs, manufactures and supplies building management controls
and security systems, principally for private sector customers in the USA. It
has subsidiaries in the UK, Germany, Poland and France. Andover's 2003 sales
were $169 million with operating profits of $28 million. At 31 December 2003,
it had 690 employees and net assets of $73 million.
Commenting on the sale today, Balfour Beatty Chief Executive, Mike Welton, said:
'Balfour Beatty has sustained Andover's market position in recent years
through substantial expenditure on product development and by acquisition. In
the last two years there has been accelerating consolidation in the US building
controls industry, with many of Andover's major competitors making acquisitions.
'Andover, operating as a separate entity in this market, would have become
increasingly vulnerable to its major competitors and faced increasingly
difficult strategic challenges. In these circumstances, it is clear that
Andover's highest future value to the Balfour Beatty Group is realised through
disposal.'
The consideration, which is to be paid in cash, will result in a 2004
exceptional profit to Balfour Beatty likely to be in excess of £100 million
after transaction costs, tax and after charging £37 million of goodwill
previously written off to reserves. Tax to be paid in respect of the sale will
be significantly reduced through Balfour Beatty's US tax loss position.
The proceeds of the sale will be used to continue to improve Balfour Beatty's
business mix to ensure that the momentum that the Group has achieved in the
growth of shareholder value in recent years continues over the longer term.
Balfour Beatty were advised on this transaction by Citigroup Global Markets
Limited in the US and UK.
ENDS
Enquiries to:
Tim Sharp
Tel: 020 7216 6884
www.balfourbeatty.com
This information is provided by RNS
The company news service from the London Stock Exchange
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