Ardian has bought a 20 percent stake in Spie batignolles, a French construction group, from London-based private equity firm Equistone.
The Paris-headquartered fund manager will pay upwards of €20 million for the stake, a source close to the matter told Infrastructure Investor. Ardian decline to disclose the exact terms of the transaction.
The firm will fund the acquisition via its Expansion Fund III, a €500 million private equity vehicle. It intends to develop the business through domestic and international build-ups.
Based in Neuilly-sur-Seine, northwest of Paris, the group has five divisions comprising construction, civil engineering, energy, public works, property development and concessions. With about 7,000 staff, it posted revenues of more than €2.1 billion in 2013.
Equistone, the former buyout arm of UK bank Barclays, originally invested in the company in 2003, when Spie batignolles spun out from parent group Spie through a management buyout. Its newly acquired stake, which at the time reportedly valued the company at €40 million, previously belonged to UK developer AMEC.
Salvepar, a French investment group, also owns 6.7 percent of Spie batignolles.
The transaction is the latest illustration of investors’ interest for large construction groups, on the premise that these provide exposure to the infrastructure asset class whilst giving the opportunity to earn the returns offered by a private equity-style expansion strategy.
In August 2010, UK-based CVC Capital Partners acquired part of the 25.8 percent stake held by Spanish construction group ACS in fellow developer Abertis – a deal which allowed the buyout firm to become the second-largest shareholder in the company with 15.5 percent.
Another instance of a private equity-backed developer is the UK’s John Laing, bought by Henderson Equity Partners in 2006 for £1 billion (€1.26 billion; $1.71 billion). The deal subsequently went sour when Henderson’s Fund II, the only asset of which was John Laing, lost 60 percent of its value in the aftermath of the Financial Crisis.
The fortunes of the company has somewhat recovered since, with John Laing posting £125.8 million in profit last year, and Henderson is now said to be seeking to monetise the investment.