Balfour Beatty (LSE: BBY), the global infrastructure company that delivers services essential to the development, creation and care of infrastructure assets, today announced that is is to sell its UK facilities management business to GDF Suez Energy Services for approximately £190m in cash.
The cash consideration will be reduced by any net debt transferring with the business. Completion is expected in the fourth quarter of 2013 and is conditional on inter alia, EU competition clearance. Net cash inflow upon completion is expected to be in excess of £150 million. The proceeds of the transaction will be used in the first instance to reduce borrowings, and over time, to fund investments.
Commenting on the sale, Andrew McNaughton, CEO of Balfour Beatty, said:
“The sale of the UK FM business represents an important step in our evolution as we intensify our focus on infrastructure. In addition to finding a good new home for the business, its customers and employees, this transaction has achieved good value and will enable us to allocate more resource to target growth sectors and markets in the future.”
The UK FM business has a number of major contracts in the UK, with clients including the Department for Work and Pensions, HM Revenue & Customs and North East Lincolnshire Council as well as the Romec joint venture with the Royal Mail Group, which provides a wide range of technical and building services to Royal Mail, Post Office and Parcelforce Worldwide. The business is expected to continue to provide facilities management services to Balfour Beatty’s current portfolio of social infrastructure PPP assets in the UK and to collaborate with the Group on the development of its investments in the future.
The UK FM business, the performance of which is reported within the Group’s Support Services segment, generated £482 million of revenue in 2012 with operating profit of £21m, and has over 9,000 employees. Gross assets at 31 December 2012 were £197m.
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> Barry does not own shares on Balfour Beatty.
