Ferrovial sells off its Infrastructure Services division
Ferrovial has sold off its Infrastructure Services division for €186M (£156M) to Spanish private equity business Portobello Capital.
The division covers the infrastructure maintenance and facilities management.
As part of the deal Ferrovial will take a 24.9% stake in Portobello Capital, worth around €20M (£16M).
It is part of Ferrovial’s long-term strategy to sell off its services divisions; which includes the sale of UK subsidiary Amey.
Ferrovial Services' Infrastructure division reported €822M (£692M) in revenue in 2020 and €29M (£24M) pretax profits. It also reported an order book worth €1.5bn (£1.2bn) in September 2021, with contracts in Spain and Portugal.
Ferrovial chief executive Ignacio Madridejos said: “This transaction represents a step forward in our Horizon 24 business plan, focused on developing sustainable infrastructure to continue creating value for our shareholders, our stakeholders and the communities in which we operate.
"We are convinced that sharing this project with Portobello will provide enormous benefits for clients and for the professionals in our Infrastructure Services area.”
Potrobello Capital founding partner Íñigo Sánchez-Asiaín added: “We are excited to support Services infrastructure business in this new phase, where we see significant organic growth opportunities and potential to consolidate a fragmented market, as well as to partner with a committed and experienced management team.
“Our investment aims to strengthen its leadership position and to expand its business to new markets.”
In 2019, Ferrovial conducted a strategic review of all its businesses aimed at focusing the company's future on infrastructure, the prime source of value and returns for its shareholders. As a result, it classified all its services operations as “available for sale”.
The sale of the Infrastructure Services business in Spain follows the sale of the Environmental Services business in Spain.
The rest of Ferrovial's services divisions are still available for sale including Amey.
Ferrovial bought Amey for about £80M in 2003, saying the acquisition would give the Spanish company “a strong position in the UK”, which it saw as “a key European market with the most experience of outsourcing services”.
Fifteen years later Ferrovial confirmed it was looking to sell its entire services division at a time when Amey was in the news for all the wrong reasons.
The Oxford-headquartered company in 2018 reported a £190M pre-tax loss after setting aside more than £200M to deal with a fast-unravelling roads contract in the West Midlands.
A legal dispute with Birmingham City Council over the quality of work delivered under the 25-year highways maintenance and management deal was dragging on and attempts to sell Amey were ultimately unsuccessful at that time.
No firm frontrunners have emerged for the company but Japanese engineering giant Nippon Koei was among those tipped back in 2018 to be likely to consider tabling a bid.