Balfour buys US builder for £180m

Balfour Beatty has splashed out £180m to buy Centex Construction, an American building company. Centex's latest financial figures show that a turnover of £800m resulted in an operating profit of £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. Centex Construction paid back a dividend to Centex Corporation, its parent, just prior to the signing of the deal.

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 its Heery International operation. In 2006, Heery had a turnover of £200m.

The group's Balfour Beatty Capital division 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.

[Contract Journal, 7th Feburary 2007, p13]