Infrastructure group Balfour Beatty has agreed to sell its facilities management (FM) business to French utility GDF Suez for £190 million.
The sale of the division, which operates under the Balfour Beatty WorkPlace brand and counts NHS Lothian and North Lanarkshire Council among its clients, will help the group to reduce debt and focus more of its efforts on infrastructure projects.
Balfour’s net debt stood at about £300m at 30 June and the group will pocket more than £150m from the sale of the WorkPlace arm once its debt and pension liabilities are taken into account.
WorkPlace employs more than 9,000 staff and generated an operating profit of £21m last year, on revenues of £482m. The business also provides technical and other services to Romec, Balfour’s joint venture with the Royal Mail Group.
GDF Suez’s existing facilities management business, Cofely, has 2,200 staff in the UK and the French group said the combined operations would have annual revenues of about £800m. Balfour 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.”
Subject to clearance from European competition regulators, the deal is expected to be completed by the end of the year.