BBGI eyes £200m deal pipeline

The German infrastructure fund manager is in line to acquire 11 projects from construction group Bilfinger and is looking to raise additional equity on the public markets before the end of the year.

Bilfinger Berger Global Infrastructure, the London-listed infrastructure fund, is in exclusive negotiations with German parent group Bilfinger Berger to acquire up to 11 projects.

The firm is considering raising fresh capital on the public markets during the last quarter of 2013 to finance the acquisition, which could be worth around £200 million (€238 million; $324 million). The fundraise would be done via a placing, open offer and offer for subscription of new shares on the London Stock Exchange, with the amount targeted still dependent on the final number of projects to be acquired.

The news follows the firm’s £85 million fundraising round in July, which surpassed its initial target of £70 million. The proceeds of this issue, which BBGI described then as “substantially oversubscribed”, were primarily destined to fund the purchase of one road and one social accommodation project in Canada.

Bilfinger Berger launched BBGI in December 2011, successfully raising £212 million for investment in roads, education, healthcare, justice and other sectors. The pipeline of deals considered then included up to 19 operational and near-operational public-private partnership (PPP) assets from Bilfinger Berger’s project investments division.

The construction group announced its intention to divest the rest of its concessions business unit at the end of May, citing the need to need to refocus on its core business as the reason for the move. The portfolio comprises 16 PPP/PFI projects in Australia, North America and Europe with committed equity of €254 million.

BBGI has been since been busy on other fronts, having acquired four projects in Germany from construction company Hochtief in August for a total consideration of £11.4 million. This followed its purchase of Kelowna Vernon Hospitals and North East Stoney Trail, both located in Canada, for £25.9 million.