Balfour Beatty pays £180m for US builder Centex Construction

Balfour Beatty has splashed out £180m to buy Centex Construction, an American building company.

Latest financial figures from Centex show that a turnover of £800m resulted in an operating profit of just over £13m, representing a margin of 1.6%.

Centex has £2.8bn-worth of future orders. Around 95% of its work is negotiated and 80% comes from long-term customers.

After paying back a dividend to its parent, Centex Corporation, prior to the signing of the deal, the acquisition will transfer into Balfour’s hands with nil net assets.

Ian Tyler, chief executive, said: “Establishing a major presence in the US on the model of our UK business, with strong capabilities in programme management, project delivery and capital investment, is an important element in Balfour’s long-term growth strategy.

“Centex Construction gives us critical mass in the US in a core Balfour business. We anticipate that it will make an immediate contribution to growth.”

In the American construction sector, Balfour already has a position in design, project and programme management thanks to Heery International. In 2006, Heery had a turnover of £200m.

The group’s Balfour Beatty Capital division also gives Balfour a presence in the US private finance market.

Centex has 1,500 employees. Its business is in construction management and building projects for clients in education, healthcare, government and office sectors. Its name will be changed to Balfour Beatty.

The acquisition takes Balfour’s annual projected US turnover to £1.8bn, with 80% of this being in the building sector. American operations will represent a quarter of the group’s total workload.