Balfour Beatty has announced the sale of its FM arm to GDF Suez Energy Services in a deal expected to be worth around £150m in net cash. Suez will look for synergies with its subsidiary Cofely
Completion of the sale is expected in the fourth quarter of 2013 and is conditional on EU competition clearance. Net cash inflow upon completion is expected to be in excess of £150m.
The proceeds of the transaction will be used in the first instance to reduce borrowings.
Balfour Beatty chief executive Andrew McNaughton said: “The sale of the UK FM business represents an important step in our evolution as we intensify our focus on infrastructure.
“In addition to finding a good new home for the business, its customers and employees, this transaction has achieved good value and will enable us to allocate more resource to target growth sectors and markets in the future.”
Balfour Beatty Workplace works in outsourced integrated services and total facilities management with capabilities including facilities management, business process outsourcing and energy services.
The business has a number of major contracts in the UK with clients including the Department for Work and Pensions, HM Revenue & Customs and North East Lincolnshire Council as well as the Romec joint venture with the Royal Mail Group, which provides technical and building services to Royal Mail, Post Office and Parcelforce Worldwide.
It is expected to continue to provide facilities management services to Balfour Beatty’s current portfolio of social infrastructure PPP assets in the UK and to collaborate with the group on the development of its investments in the future.
The UK FM business, the performance of which is reported within the group’s support services segment, generated £482m of revenue in 2012 with operating profit of £21m, and has more than 9,000 employees.