Bilfinger, the German engineering and services company, confirmed this week that it had offered to buy privately owned British commercial property consultant GVA Grimley Holdings, as it looks to increase its hold of the facilities management market and to continue to reduce its reliance on construction.
The offer comes as the firm completes its last construction project in the UK – the £776m Edinburgh Tram, following six years of building work and problems, including a long-running dispute between the council and its contractor. The tram will open on 31 May.
Reuters reported the GVA deal would be in the order of £150m. Bilfinger said on Tuesday had submitted an offer to the nearly 300 shareholders of GVA Grimley and both parties have agreed to keep the terms confidential. The offer runs for four weeks.
GVA generated a turnover of £147.3m in the year to the end of April, up from £140.4m on the previous year, and employs around 1,500 people across the UK across a range of disciplines.
Earlier this month Bilfinger announced plans to sell its construction interests in Europe – though it will retain its interests in Germany. A Bilfinger spokesman told Construction Manager that it no longer had construction interests in the UK following completion of the Edinburgh tram. “We are an industrial services company, primarily maintaining oil and gas plants. We are planning to sell our civil and infrastructure units in Europe, but will retain our building and construction operation in Germany where we are very dominant. We have a strong business in facilities services in Germany and there are quite a lot of synergies between the FM and building side.”
The Edinburgh Tram opens on 31 May, but the six-year project has been dogged by problems
The spokesman said that the company was interested in GVA Grimley as a route to strengthening its facilities business in the UK to complement its recent acquisitions. Bilfinger’s acquisitions include UK facility services company Europa, automation technology specialist GreyLogix and power plant control systems specialist Helmut Mauell.
A revised timetable was drawn up for the Edinburgh Tram in April 2011. By then the project had slipped two years behind the original schedule and gone 40% over budget following a series of disputes between Bilfinger and original client, Transport Initiatives Edinburgh.
Bilfinger blamed the cost overruns on design changes and problems encountered during utility diversion work.
The acquisition of GVA will more than double sales at Bilfinger’s real estate division from the current level of around €160m (£130.2m), Bilfinger said.
Bilfinger’s Dr Jochen Keysberg, member of the executive board, said: “We want to continue to grow our facility services operations in the important British market. We are thus moving the internationalisation of our activities in the Building and Facility business segment forward in a targeted manner.”
In Germany, Bilfinger is market leader in the area of real estate and facility services and offers its clients a comprehensive range of services that includes design, construction and management of real estate all from a single source. In financial year 2013, activities in the Building and Facility business segment contributed approximately £1.9bn to the Group’s total output volume of £7bn.
