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UPDATE 1-Bilfinger still has 800 mln eur for more acquisitions
March 20, 2014 / 2:30 PM / 4 years ago

UPDATE 1-Bilfinger still has 800 mln eur for more acquisitions

* CEO says eyeing potential targets in United States, Asia

* Is interested in boosting industrial, power businesses (Adds quotes, details)

By Marilyn Gerlach and Ilona Wissenbach

MANNHEIM, Germany, March 20 (Reuters) - German engineering and services group Bilfinger SE is eyeing potential targets in the United States and Asia as it pursues its ambition to grow further via acquisitions.

Bilfinger has intensified merger and acquisition activity as it aims to wean itself off a dependence on construction, and has shifted its focus toward more services-oriented businesses, as well as designing and engineering plants and buildings.

Chief Executive Roland Koch, who was once premier of the federal state of Hesse, told reporters on Thursday that Bilfinger still has the capability to fund several smaller acquisitions totalling up to 800 million euros ($1.1 billion) in the next two years, but ruled out mega-deals.

“There won’t be any big bang (acquisition),” Koch said at the company’s annual results conference. It had already released its main figures on Feb. 11.

Since 2011, when Koch took over as chief executive, Bilfinger has spent about 800 million euros - on an enterprise value basis including debt and equity - acquiring about two dozen companies, including UK facility services company Europa, automation technology specialist GreyLogix and power plant control systems specialist Helmut Mauell.

Koch said potential targets were in the industrial services sector, such as automation and measurement technology companies in the United States, Europe and Asia.

KEEPING TARGETS

Bilfinger is also seeking to beef up its position in the United States, Middle East and Asia in the fields of power plant technology and renewable energy.

Koch said Europe would not be a main focus of acquisitions, since 80 percent of sales already come from the region, which has suffered from economic weakness leading to delays in contract awards early last year, including for bigger and higher-margin projects.

Bilfinger also on Thursday said it was keeping its medium-term targets, including to boost output volume, or the value of work completed, to between 11 billion euros and 12 billion by 2016.

It also aims for a profit margin of around 6 percent, based on earnings before interest, tax and amortization (EBITA), helped by cost cuts and an improving European economic recovery.

Output volume last year was down 1 percent at 8.51 billion euros as governments tightened budgets, dampening demand for infrastructure projects, while companies were reluctant to make investments.

Bilfinger in 2013 launched an efficiency programme including plans to cut about 1,250 administrative jobs over the next two years.

Shares in Bilfinger have risen 11 percent so far this year compared with a 5.7 percent advance in German construction rival Hochtief and a 6.9 percent gain on the STOXX Europe 600 Construction and Materials Index.

$1 = 0.7189 Euros Reporting by Marilyn Gerlach and Ilona Wissenbach; Editing by Maria Sheahan

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