Hochtief, Essen, Germany, agreed to buy Flatiron Construction Corporation, Longmont, Colo., from the Dutch Royal BAM Group for $240 million, plus $1 million in interest per month from July 1, 2007, until financial close. Hochtief's supervisory board has already granted its approval for the acquisition. 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 $626 million. The company ranks among the top 10 vendors in the transportation segment in the United States. In western Canada, Flatiron renders civil engineering services for public-private partnership (PPP) projects.
With Flatiron, Hochtief positions itself in the now developing U.S. market for public-private partnerships at an early stage. The group, already the No. 1 general builder in the U.S. via its subsidiary Turner, will now also be present in the field of civil engineering to profit from the country's upcoming investment into infrastructure.
“Flatiron is a perfect fit for us,” said Herbert Ltkestratktter, chairman of the executive board of Hochtief. “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 U.S. general building, with a well-positioned vendor in the U.S. civil engineering market.”
Flatiron has excellent growth prospects because of increasing investment in highway and bridge building and the 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.
Hochtief will compile a team to support the Flatiron management. Martin Rohr, member of the executive board of Hochtief, will take on the role 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.
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