Balfour Beatty, the international engineering, construction and services group, is to sell its US-based Andover Controls division to Schneider Electric for $403 million.
The transaction is expected to be completed by the end of July following the receipt of regulatory approvals.
Andover Controls designs, manufactures and supplies building management controls and security systems, principally for private sector customers in the USA. It has subsidiaries in the UK, Germany, Poland and France.
Andover’s 2003 sales were $169 million with operating profits of $28 million. As of December 31 2003, it had 690 employees and net assets of $73 million.
Commenting on the sale today, Balfour Beatty Chief Executive, Mike Welton, said: “Balfour Beatty has sustained Andover’s market position in recent years through substantial expenditure on product development and by acquisition. In the last two years there has been accelerating consolidation in the US building controls industry, with many of Andover’s major competitors making acquisitions.”
“Andover, operating as a separate entity in this market, would have become increasingly vulnerable to its major competitors and faced increasingly difficult strategic challenges. In these circumstances, it is clear that Andover’s highest future value to the Balfour Beatty Group is realised through disposal.”
The cash from the sale will result in a 2004 exceptional profit to Balfour Beatty likely to be in excess of £100 million after transaction costs, tax and after charging £37 million of goodwill previously written off to reserves. Tax to be paid in respect of the sale will be significantly reduced through Balfour Beatty’s US tax loss position.