Unsolicited bids from multiple parties have led UK-based engineering and construction firm Laing O’Rourke to put its Australian business on the block.
Group chairman Ray O’Rourke said in a statement on January 10 the company had received “unsolicited approaches from a number of parties expressing interest in acquiring parts of our business, including our very successful Australian business,” towards the end of last year.
One of Australia’s largest engineering and construction firms, Laing O’Rourke operates across the mining, infrastructure, commercial and industrial sectors.
O’Rourke, who bought the struggling Laing Construction for £1 to create Laing O’Rourke in 2001, said the unsolicited bids for the Australian arm of the company helped trigger a strategic review of its business portfolio in the fourth quarter of 2015.
He said the bids were “reflective of both the strength and attractiveness of [the Australian] element of the group which, having performed well in recent years, is now strongly positioned in the emerging infrastructure market with blue-chip clients, a solid pipeline, a talented leadership team and great people”.
“Accordingly a formal sale process will now commence,” he said, appointing HSBC Investment Bank to conduct the sale.
Laing O’Rourke’s Australian business was established in 2006 when it acquired Barclay Mowlem from fellow British firm Carillion.
According to one report in The Australian, CIMIC Group (formerly Leighton Holdings) could lead the way during a bidding process for Laing O’Rourke which could fetch roughly $1bn.
CIMIC reportedly has an appetite for mergers and acquisitions; this was on display as recently as Wednesday, when it made a $153.1m bid to acquire a 100% stake in smaller engineer Sedgman Limited.
Along with its findings with regards to the Australian arm, Laing O’Rourke’s strategic review also came to the conclusion that its European businesses – the UK arm in particular – were very well placed for strong growth potential, thanks to the UK Government’s renewed focus on infrastructure and housing development.
“If we seize these growth opportunities, further UK investments will be required especially in areas that promote our competitiveness and the attractiveness of our offering to clients,” O’Rourke explained.
Laing O’Rourke said it will not provide commentary during the sale process. It ensured its Australian hub would remain focused on the delivery priorities of clients and projects, and would continue to actively pursue a range of tenders.