London-based construction firm Balfour Beatty has confirmed that it is looking to raise capital for a “significant and complementary” acquisition.
The company has said that discussions on the acquisition are at an advanced stage, but has not disclosed any further details on the buyout or the fundraising. However, the cash call is expected to be for around £350 million.
Balfour is the latest to come out with a rights issue, as more companies try to pay off debt and, as in this case, strengthen their balance sheets to prepare for acquisitions.
Panmure Gordon stockbrokers say that the UK’s biggest building firm is looking to companies in North America following several recent ventures in the region.
They added that the company was unlikely to be looking at expansion in the UK, given previous additions of major players Mansell, Birse and Cowlin.
Panmure Gordon analyst Andy Brown said: “The company has a clear strategy and a strong recent record on acquisitions.”
Balfour, whose current projects include the London Olympics Aquatic Centre, recently reported a 14% rise in first-half profits to £108 million.
It has a £12.5 billion order book and operations in the US account for 30% of its revenues.
