HOCHTIEF Aktiengesellschaft will take over Flatiron Construction Corp., Longmont from the Royal BAM Group, based in the Netherlands.
The purchase price amounts to EUR 173 million (USD 240 million) plus USD 1 million interest per month from July 1, 2007 until financial close. After the cartel authorities have given their approval, HOCHTIEF expects to consolidate the company for the first time in Q4 2007. In 2006, Flatiron and its almost 1,700-strong workforce generated annual revenues of more than EUR 496 million (USD 626 million). The company ranks among the top ten vendors in the transportation segment in the USA. In West Canada, Flatiron renders civil engineering services for public-private partnership (PPP) projects.
With the acquisition, HOCHTIEF systematically implements its strategic goals: The Group, which is already the No. 1 general builder in the US via its subsidiary Turner, will now also be present in the field of civil engineering with an important company and profit from the USA's upcoming multi-billion programs of investment into infrastructure. With Flatiron, HOCHTIEF also positions itself in the now developing US market for public-private partnerships at an early stage. The acquisition thus ideally complements the existing competencies.
Dr. Lütkestratkötter, Chairman of the Executive Board of HOCHTIEF says, “Flatiron is a perfect fit for us: We now combine decades of civil engineering competence of the HOCHTIEF Group, the international PPP know-how of HOCHTIEF PPP Solutions and the broad market position of Turner in US general building, with a well positioned vendor in the US civil engineering market.” The Group expects a wealth of synergies which, in addition, will have a positive effect on profit.
In the USA, Flatiron has excellent growth prospects due to increasing investment in highway and bridge building and to the good market position it holds in a number of states. In the western part of Canada, significant investments are planned into local transportation routes, in particular for Alberta's booming oil sand and mining industry. Flatiron is positioned very well in West Canada, too, and contributes its civil engineering competence to PPP projects. The HOCHTIEF Group will profit from this starting position in order to also gain a foothold in the US PPP market as announced. To this end, all activities of Flatiron will be closely interlocked with those of HOCHTIEF PPP Solutions.
HOCHTIEF will compile a team of HOCHTIEF and Turner responsibles to support the experienced Flatiron Management. Dr. Martin Rohr, member of the Executive Board of HOCHTIEF Aktiengesellschaft, will take on the function of Chairman of the Board. Flatiron will be led as an independent subsidiary within the HOCHTIEF Americas division and will profit from networking with Turner and the other HOCHTIEF Group companies.