Balfour to Raise Cash for Acquisition
Byline: Robert Lea
BALFOUR Beatty is on the verge of a major acquisition believed to be in the US which will see it go to shareholders to raise around [pounds sterling]350 million via a rights issue.
The British construction giant, possibly the best known UK company in the sector with major contracts like the continual roadworks on the M25 London orbital, has already signalled its expansion plans in North America.
After strategic acquisitions over the last 15 months in California and in the south east of the US, America now makes up 30% of Balfour's revenues, and chief executive Ian Tyler has made "growing our business presence in the US" his most prominent goal.
The plan is for Balfour to take advantage of President Barack Obama's huge stimulus plans to drag the US out of recession at a time when the asset values of American companies are at historical lows, and ripe for the picking.
Only last month Balfour reported it had landed a $415 million roadbuilding project in Texas.
Today the company was keeping tight-lipped over the identity of the acquisition target, but admitted the deal and the fund-raising plans are close at hand.
"Balfour Beatty confirms it is in advanced discussions regarding a significant and complementary acquisition which would materially accelerate the fulfilment of its existing strategy," the company said in a statement to the Stock Exchange "If the acquisition proceeds, it is expected that it would be substantially funded by a rights issue," it added. …