Balfour raises 380m to buy rival US firm

CONSTRUCTION firm Balfour Beatty yesterday said it has agreed to buy US project management firm Parsons Brinckerhoff for $626m (&pound;380m), in a deal partly funded by a surprise rights issue.<br /><br />The group said it was launching a fully underwritten &pound;353m cash call to fund the acquisition, which it believes will give it a leading position in the US market.<br /><br />Balfour Beatty, which last month reported a 14 per cent rise in pre-tax profits to &pound;108m, said the three-for-seven issue of 205.5 new shares would be priced at 180p, a 46.8 per cent discount to Wednesday&rsquo;s closing price.<br /><br />The rights issue is fully underwritten by banks RBS Hoare Govett, JP Morgan and Citigroup.<br /><br />Balfour Beatty said the takeover will enhance the group&rsquo;s long-term growth potential and will strengthen its presence &ldquo;across the entire life cycle of major infrastructure assets&rdquo;.<br /><br />Balfour chief executive Ian Tyler said: &ldquo;It is a key step in becoming a global integrated leader in infrastructure services.&rdquo;<br /><br />Balfour, which has spent around &pound;1bn on acquisitions since 2007, said it derived around 30 per cent of its business from the US<br /><br />In the year ending 31 October 2008, Parsons Brinckerhoff posted operational profits of $107m. <br /><br />The deal will mean a significant pay off for Parsons&rsquo; 12,650 employees, who own the company.<br />