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

    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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  • Audio

    Audio

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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.

 

173 Bilfinger WTB 2015 Neu 2016-04-15-01

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