Balfour Beatty Acquires US Trackwork Companies
BICC PLC
10 April 2000
BALFOUR BEATTY ACQUIRES US TRACKWORK COMPANIES FOR $50 MILLION
==============================================================
Balfour Beatty, the international engineering, construction and services
group, announces today that it is to acquire two US rail trackwork companies,
Marta Track Constructors Inc and Metroplex Corporation, for an initial
consideration of $50 million.
Marta Track is a long-established trackwork contractor, based near Pittsburgh,
Pennsylvania. Metroplex, founded in 1983, has offices in Washington DC and
Pittsburgh, Pennsylvania.
The two acquired companies had aggregate 1999 sales of $40 million (excluding
the value of owner free-issue materials) and aggregate operating profits of $6
million. They have extensive experience of major rail projects in the USA and
a current order book of approximately $150 million. The combined business
will have net assets of approximately $10 million.
Commenting on the acquisitions, Mike Welton, BICC Group Chief Executive, said
today:
'These acquisitions give Balfour Beatty an immediate and significant presence
in the US rail market which has excellent growth potential and procurement
trends which match our established multi-disciplinary rail projects and
engineering capabilities. We already have a successful $600 million business
in the USA to which this is a first-class addition'.
The US rail market is the largest in the world with project expenditure of
approximately $9 billion per annum and maintenance expenditure of $6 billion
per annum on fixed infrastructure. Current market trends include steadily
increasing project spending, a significant increase in ring-fenced federal
funding support for transport projects, increasing outsourcing by the rail
utilities and freight companies of their maintenance requirements and an
increasing propensity for rail utilities to procure work on a turnkey basis.
The project experience of the acquired companies includes the $75 million
Chicago-Cleveland double-tracking project, the $24 million first phase of the
St Louis Missouri Light Rail System and the 75-mile Argentine Yard
reconstruction in Kansas City.
Marta Track is currently constructing a 50-mile extension to the DART system
in Dallas, Texas. Metroplex has recently secured three major contracts
amounting to some $150 million in value. These are to construct the BART San
Francisco Airport Extension, the Alameda Corridor Rail Project in Los Angeles
and the Southern New Jersey Light Rail System.
The consideration for the acquisition is payable as to $50 million on
completion and up to $15 million as an earn-out over three years.
It is anticipated that this acquisition will be approximately earnings neutral
in 2000 as the new major projects are in their early stages and that earnings
enhancement will begin in 2001.
Balfour Beatty Rail is the UK's largest rail engineering and services provider
and is an international leader in rail engineering projects. In 1999, it had
sales of £351 million and operating profits of £18 million. It is close to
completing one of the largest rail projects in the USA, the $475 million
electrification of Amtrak's North East Corridor between Boston and New Haven.
Enquiries to:-
Tim Sharp
Head of Corporate Communications
BICC Group
Tel: 020 7629 6622
www.bicc.com
Notes to Editors
----------------
Balfour Beatty Rail's capabilities range from very high speed rail to mass
rapid transit, covering intercity, rural and commuter routes. The range of
expertise covers trackwork, signalling, overhead and third rail
electrification, power supply systems, switches and crossings and civil
engineering, as well as full-service maintenance and renewal capabilities.
Balfour Beatty is already well established in the US market. Its civil and
specialist engineering business, Balfour Beatty Inc. had 1999 sales of over
$320 million and is a top 10 US civil contractor. It has a range of major
projects underway in California, Texas and in the Eastern States, and an order
book of more than $800 million.
Heery, Balfour Beatty's leading design and construction management business'
has annual sales in the US of approximately $150 million. Andover Controls
the US based Balfour Beatty subsidiary which is a leading manufacturer of
building management control equipment and systems, based in Massachusetts had
1999 sales of over $100 million.
Latest directors dealings
- 1 day ago Savannah Energy
- 1 day ago Buccaneer Energy PLC
- 1 day ago Savannah Energy
- 1 day ago Carclo
- 1 day ago Schroder Japan Growth Fund