Acquisition

RNS Number : 0312W

Balfour Beatty PLC

05 June 2008

 



5 June 2008

BALFOUR BEATTY ACQUIRES BARNHART, THE LEADING CALIFORNIAN CONSTRUCTION MANAGEMENT COMPANY FOR $116 MILLION

Balfour Beatty, the international engineering construction, services and investment group, announces today that Heery International, Balfour Beatty's US professional and technical services arm, has acquired Douglas E Barnhart Inc (Barnhart) for a cash consideration of $116 million from management and family. 

Barnhart is the largest programme management, construction management and building company in San Diego and amongst the largest such companies in California. It is the sixth largest education sector builder in the US as a whole.

Commenting on the acquisition, Balfour Beatty Chief Executive Ian Tyler said:

'Heery International is already a national leader in the US public education sector.  California is one of the US's fastest growing markets offering substantial opportunity in education and other construction management markets.  The addition of Barnhart substantially enhances the Group's presence in education and in California, where we are already a major player in civil engineering and construction project management'.

Barnhart provides a variety of risk averse delivery methods including design and build, fee based construction management and programme management.  In addition to giving Heery a strong position in the important Greater San Diego region in its main markets, it enhances the potential of Heery's JCM project management operation, based in Los Angeles, which is also addressing a fast growing design and build market.

Barnhart is based in San Diego and employs 450 people. Its major clients include San Diego State University, California State University, University of California, Pasadena City College and San Diego Lindbergh Field Airport. It is also active on major bond financed school renovation and new build programmes for Poway, Oceanside, Tustin and Santee School districts, amongst others. 

The executive management team, including the President, the Director of Operations and the Director of Business Development, have all agreed to continue in their current roles.  

In 2008, Barnhart was awarded the Associated General Contractors National 2008 Award for Safety Excellence.

In the year to 30 September 2007, Barnhart had gross revenues of $530 million and operating profits of $17 million, with gross assets of $197 million. It has a confirmed order book of approximately $1.1 billion gross.  At financial close, it is anticipated that the company will have a net cash balance in excess of $50 million. The consideration, which will be funded from Balfour Beatty's own cash resources, is based on a balance sheet with $35 million of net assets, with a dollar for dollar adjustment against actual net assets acquired. An additional $7 million will be paid for incremental tax benefits.

ENDS

Enquiries to:    Tim Sharp

           Tel: [phone]

           www.balfourbeatty.com

Notes to Editors

1.         Heery International is a 1,100 person architectural, design, engineering, programme and construction management company with annual revenues of $1.2 billion. It is actively engaged in design and construction projects worth over $6 billion per year.

 

2.         Heery has existing Californian operations in JCM and FPM, both acquired in 2005. JCM is one of Southern California’s premier project management companies. FPM is its facilities, planning and management subsidiary. JCM is particularly strong in higher education and government markets. Major clients include Boeing, Canon, Nissan, the US Food and Drug Administration, the University of California and California State University.

 

3.         Heery is the leader in the US K-12 education market. It has experience of over $20 billion of K-12 projects with over 160 schools districts and has worked with Ohio, New Jersey and Arizona in managing state-wide build programmes. It has worked on secondary education projects at over 400 colleges and universities across the US.

 

4.         Balfour Beatty Infrastructure, the Group’s civil engineering and services provider for the transportation and water infrastructure markets, has a strong presence in California with a range of major current projects underway including three major water contracts with a total contract value of over $420 million and a number of highway and rail construction contracts.

 

5.         Balfour Beatty is a world-class engineering, construction, services and investment business, well-positioned in infrastructure markets which offer significant long-term growth. We work in partnership with sophisticated customers who value the highest levels of quality, safety and technical expertise. Our skills are applied in appropriate combinations to meet individual customer needs.

 

END

 

 

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