M&R homes in on US construction acquisition

25 August 2017

Restructured engineering and construction group Murray & Roberts (M&R), which offers project lifecycle services in selected natural resources markets globally, is actively pursuing a US acquisition, which it hopes to consummate during the company’s 2018 financial year.

CEO Henry Laas said M&R is assessing opportunities valued at between R400- and R500-million and has whittled down to four the number of prospective acquisition targets. All the companies have a track record of implementing construction projects, primarily in America’s oil and gas sector.

“We already have a strong engineering presence in the US, though CH-IV, but we don’t yet have a construction capability in that market – so we can engineer things, but we can’t build them. We want to buy a company in the US that can bring an implementation capability that we can marry with our engineering capability.”

M&R is not limiting itself to buying full ownership of a company and will consider buying a substantial interest in a larger entity.

Acquisitive growth has also been integrated into M&R’s new strategy, which is focused on consolidating the group as a multinational presence in global oil and gas, water and power and underground mining markets.

The strategic overhaul is the product of a far-reaching restructuring process, which has been under way for a number of years and was accelerated during 2017 when the group disposed of its Southern African infrastructure and building businesses to a consortium led by Southern Palace.

M&R is currently in the process of withdrawing from the Middle East general construction market, which emerged as a major drag on the group’s financial performance in 2017.

Notwithstanding a slump in attributable earnings to R48-million, from R753-million, and a weakening in its order book to R26.9-billion from R28.7-billion a year ago, Laas says he is optimistic that 2018 will prove to be the start of a new growth period for the company.

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