Strategic Sale

Who Will Get Bilfinger’s Crown Jewels?

The logo of German industrial services provider Bilfinger is pictured outside its headquarters in Mannheim, Germany, May 11, 2016. REUTERS/Ralph Orlowski
Considering a strategic sale: Bilfinger's headquarters in Mannheim, Germany.
  • Why it matters

    Why it matters

    The intense interest in Bilfinger’s facilities management division from a variety of prospective buyers highlights a sector trend. Such a division can provide a steady income in an often cyclical business.

  • Facts


    • Struggling German construction and engineering company Bilfinger is expected to decide who gets to buy its lucrative facilities management division in the next few days. Although considering the high levels of interest and market trends, it may not sell at all.
    • Possible buyers for the division include major private equity firms, construction firms and real estate brokerages.
    • The Bilfinger division has 20,000 employees and €2.6 billion, or $2.9 billion, in revenue. It is being valued at around €1 billion.
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For half a year, prospective investors have been descending on the headquarters of Bilfinger, a struggling German construction and engineering firm based in the southwestern city of Mannheim. Private equity groups KKR and EQT of the U.S. and Sweden respectively, construction giants Vinci of France and Strabag of Austria, as well as international real estate brokerages CBRE and JLL, are all interested in Bilfinger’s lucrative facilities management division.

A decision will be made in the coming days, with JLL and EQT seen as the front runners. But it’s equally possible that the keen interest being shown in the business may persuade Bilfinger to hold on to its crown jewels and use the stable income it generates to restructure its plant engineering division.

The wrangling over the Bilfinger division – with 20,000 employees and €2.6 billion, or $2.9 billion, in revenue – shows how attractive facilities management has become.

Lünendonk, a market research and consultancy firm, estimates that the market volume for building services in Germany amounts to almost €50 billion.


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There have been a number of major acquisitions in the sector in recent years. At the end of 2015, Bremen-based construction firm Zech Group bought the German business of insolvent Dutch technology and building services firm, Imtech, with around 2,300 employees; they then changed its name to ROM Technik.

Earlier in 2015, U.S. real estate broker CBRE spent around $1.5 billion on Global Workplace Solutions (GWS), the building management unit of Johnson Controls.

In 2014, Austrian construction group Strabag bought Stuttgart-based services group DIW with 6,000 employees.

The buyers want to be able to offer a full range of services pertaining to real estate. The aim is also to shore up their cyclical core businesses with stable income from building services.

“Customers are increasingly asking about integrated building management services for their global portfolios,” said William Concannon, the head of CBRE-GWS.

Germany’s building services industry association, GEFMA, said it saw a “trend towards all-round services.”

The trend is likely to accelerate. JLL – which used to be called Jones Lang LaSalle – wants to expand its building services division in Europe to 5,000 employees, up from 2,000, over the next few years, Christian Koch, a management board member at JLL Deutschland, told WirtschaftsWoche.


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Around a quarter of that growth will be in Germany where JLL currently employs only 275 real estate and building services staff. That explains why JLL is so interested in the Bilfinger management services division, which is said to be priced at around €1 billion.

Bilfinger is the market leader in the German facilities services sector. Its smaller rivals are under pressure to embark on acquisition-led growth to win new customers.

Rainer Eichholz, co-managing director of Zech group, said the market potential in Germany had largely been exhausted. “There’s more future market potential abroad,” he said, adding that he expected the consolidation to continue.

The former head of European operations at German construction firm Hochtief, Bernd Romanski, said potential takeover targets included the Dorfner Group from Nuremberg, ranked at number 19 in the sector, as well as Götz in Regensburg, which is ranked at number 15, and Klüh in Düsseldorf, ranked at number 12.

Michael Wisser, owner of the Frankfurt-based Wisag group, the third biggest facilities management company in Germany, gave a clear answer when asked about whether he planned to sell.

“I have no offers and I’m not interested in that. The market knows what I do with requests like that,” he said, pointing to his trash can.

This article originally appeared in the business magazine WirtschaftsWoche. To contact the author:

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