WSP to acquire Parsons Brinckerhoff

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Balfour Beatty has confirmed that Canadian firm WSP will buy its professional services division, Parsons Brinckerhoff (PB).

Subject to approval from Balfour Beatty’s shareholders, WSP Global will acquire PB for US $1.35 billion (£820 million). Of the £820 million, £67 million will be retained within PB.

In a statement, Balfour Beatty said it expected to complete the sale in the final quarter of 2014.

Following deductions for tax and transaction costs, £200 million will be returned to Balfour Beatty shareholders and £85 million will be used to reduce the group’s pension fund deficit.

Steve Marshall, executive chairman of Balfour Beatty, said: “The board believes that the sale price of £820 million 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.

“In the US, our core construction business is well positioned in a recovering market. 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 chief executive to take the company forward.”

The sale price is 11 times PB’s underlying EBITDA for the year ended December 31, 2013.

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