Apr 9 2007
Balfour Beatty plc, UK's largest construction company, has completed the acquisition of Centex Construction -- a leading U.S. construction-management company -- for a cash consideration of $367 million.
The acquisition from Centex Corporation, a leading-U.S. homebuilder, is a key milestone in the British construction, services, and investment group's plans to become a major player in the U.S. building market. The acquisition was first announced on February 1, 2007 and was completed on March 31, 2007. The addition of Centex Construction to Balfour Beatty's portfolio gives the company now total annual U.S. revenues of approximately $3.5 billion.
Centex Construction is a top-tier building construction company. It has grown strongly in recent years through its regional businesses in four of the U.S.'s largest- and fastest-growing markets -- Texas, Florida, Washington, D.C. and North Carolina. The company is also a major player in the military-housing market. Centex Construction will have total revenues of over $2.2 billion this year, with backlog at record levels and profits growing. Effective immediately, Centex Construction will operate under the name Balfour Beatty Construction.
Andy Rose, Balfour Beatty's Group Managing Director for the U.S., commenting on the transaction, said: "Establishing a major presence in the U.S. building market, with strong capabilities in program management, project delivery, and capital investment, is a crucial element in Balfour Beatty's long-term growth strategy. Centex Construction is a high-quality construction services company which gives us a profitable critical mass in the U.S. in a business core to Balfour Beatty."
Robert C. Van Cleave, Chairman and CEO of Centex Construction (now Balfour Beatty Construction), said: "We are extremely excited about this change in ownership. Balfour Beatty has a nearly 100-year history focused on commercial- and institutional-building construction, and through our alignment to their focus and strategy, I am convinced that we will be better positioned as a national company to pursue our growth goals."
Balfour Beatty is already a leader in the U.S. marketplace in selected design-, project-, and program-management markets through Heery International, and in the growing U.S. private-finance market through Balfour Beatty Capital. Other Balfour Beatty businesses in the U.S. include its civil engineering business, Balfour Beatty Infrastructure Inc., and Balfour Beatty Rail, Inc. This newest acquisition offers the company additional potential to grow in its target building and investment markets, as well as give it access to a strong, well-positioned, and well-managed business.
Balfour Beatty operates on a very decentralized basis and -- new name apart -- little change is expected, with its new business encouraged to continue to pursue its existing, highly successful growth strategy.
Andy Rose continued, "Balfour Beatty Construction serves a total addressable U.S. market of over $400 billion. Left to its own devices, I am very confident it will continue to grow. Backed by Balfour Beatty's resources and working, where appropriate, in conjunction with our other U.S. businesses, I am quite sure that we will be able to help Robert and his team accelerate their rate of growth even further."