WSP Global, a Canada-based professional services firm, has entered into a purchase agreement with Balfour Beatty to purchase Parsons Brinkerhoff, Balfour Beatty’s professional services division for $1.24 billion, according to a press release on the WSP website. Terms have been approved by the boards of directors for both companies, according to the release. The deal is expected to close before the end of the year.
Parsons Brinckerhoff is a global consulting firm assisting public and private clients to plan, develop, design, construct, operate and maintain thousands of critical infrastructure projects around the world. Founded in New York City in 1885, Parsons Brinckerhoff is a diverse company of 14,000 people in more than 150 offices on five continents. The company was involved with the original sections of the New York City subway and was also involved on the recent Second Avenue Subway, East Side Access and No. 7 Line Extension projects. Other recent tunneling projects include the Port of Miami Tunnel and Portland CSO projects, among others.
Parsons Brinckerhoff was purchased by Balfour Beatty in 2009 for $642 million. However, Balfour Beatty announced early this year that was considering the sale of Parsons Brinckerhoff following the revelation that profits for 2014 were expected to be down $50 million in its U.K. construction business. In other moves, CEO Andrew McNaughton stepped down and executive chairman Steve Marshall took over on an interim business.
As part of the change in strategy, the Balfour Beatty announced that it was exploring ways to simplify its structure and create a more focused group. According to the statement released by Balfour Beatty: “Since its acquisition by Balfour Beatty in 2009, Parsons Brinckerhoff has continued to be a highly successful business and has grown significantly under Balfour Beatty’s ownership. As anticipated at the time of the acquisition, there has been growth in the market towards design and build and Public Private Partnership contracts. However, having professional services and construction capabilities combined within one organization has not delivered material competitive advantage for the Group. Therefore, we are examining how best to realize the substantial value of the Parsons Brinckerhoff business.”