Ferrovial continues to expand international acquisitions
Ferrovial Agrees to Buy Swissport for EU336 Million
Aug. 22, 2005
Joao Lima and Paul Tobin, Madrid
Bloomberg.com
Copyright 2005
Aug. 22 (Bloomberg) -- Grupo Ferrovial SA, Spain's biggest builder, agreed to purchase baggage handler Swissport International AG from Candover Investments Plc for 336 million euros ($409 million) to expand in transport services.
Swissport, based in Zurich, is the world's second-biggest baggage handler, operating at more than 170 airports. Madrid- based Ferrovial, which has spent more than 4 billion euros on purchases since 1997, will also assume 310 million euros of debt.
Spanish builders have used proceeds from a housing boom and state spending on roads and railways to expand into services that offer wider profit margins and faster growth than construction. Ferrovial got 40 percent of first-half revenue from abroad, where investments include airports in the U.K. and Australia and toll roads in Canada and U.S.
``This operation is another step in our company's internationalization strategy,'' Ferrovial Chief Executive Officer Joaquin Ayuso said in the e-mailed statement. ``With Swissport we will be maintaining our focus on businesses with a recurring and stable earnings performance.''
Shares of Ferrovial gained as much as 25 cents, or 0.4 percent, to 62.50 euros and were trading at 62.45 euros as of 9:14 a.m. in Madrid. The stock has climbed 59 percent this year, giving Ferrovial a market value of 8.76 billion euros and ranking it No. 1 amongst Spanish builders and No. 3 in Europe.
`Reasonable Price'
``The purchase makes a lot of sense,'' said Jordi Padilla at Atlas Capital in Madrid, which manages $185 million. ``The price seems reasonable.''
For Candover, based in London, the sale of Swissport will generate a return of 2.6 times the original cost, director Charlie Green said in an interview. The buyout firm bought the business for 393 euros in February 2002 from the former Swissair Group.
The disposal, together with the sale of a stake in casino and bingo-hall operator Gala Group Holdings Plc, announced last week, will result in an increase of 77 pence a share in the net asset value of Candover, the firm said.
Swissport, which operates in 40 countries, had revenue of 836 million euros last year, 25 percent more than when Candover bought the business, Green said. About 90 percent of sales come from Europe and North America, with Swiss International Air Lines Ltd., the successor to Swissair, the company's biggest customer.
Ferrovial is already involved in managing of airports in Bristol, England, and Sydney, Australia, and runs toll roads in Toronto, Chicago and Ireland. The company last month bought U.S.-based Webber Group for $220 million to help undertake work on a 1,300 kilometer (806-mile) Texas highway project.
To contact the reporter on this story:
Joao Lima in Madrid at jlima1@bloomberg.net.
Paul Tobin in Madrid at ptobin@bloomberg.net.
©2005 Bloomberg L.P. All rights reserved : www.bloomberg.com
Aug. 22, 2005
Joao Lima and Paul Tobin, Madrid
Bloomberg.com
Copyright 2005
Aug. 22 (Bloomberg) -- Grupo Ferrovial SA, Spain's biggest builder, agreed to purchase baggage handler Swissport International AG from Candover Investments Plc for 336 million euros ($409 million) to expand in transport services.
Swissport, based in Zurich, is the world's second-biggest baggage handler, operating at more than 170 airports. Madrid- based Ferrovial, which has spent more than 4 billion euros on purchases since 1997, will also assume 310 million euros of debt.
Spanish builders have used proceeds from a housing boom and state spending on roads and railways to expand into services that offer wider profit margins and faster growth than construction. Ferrovial got 40 percent of first-half revenue from abroad, where investments include airports in the U.K. and Australia and toll roads in Canada and U.S.
``This operation is another step in our company's internationalization strategy,'' Ferrovial Chief Executive Officer Joaquin Ayuso said in the e-mailed statement. ``With Swissport we will be maintaining our focus on businesses with a recurring and stable earnings performance.''
Shares of Ferrovial gained as much as 25 cents, or 0.4 percent, to 62.50 euros and were trading at 62.45 euros as of 9:14 a.m. in Madrid. The stock has climbed 59 percent this year, giving Ferrovial a market value of 8.76 billion euros and ranking it No. 1 amongst Spanish builders and No. 3 in Europe.
`Reasonable Price'
``The purchase makes a lot of sense,'' said Jordi Padilla at Atlas Capital in Madrid, which manages $185 million. ``The price seems reasonable.''
For Candover, based in London, the sale of Swissport will generate a return of 2.6 times the original cost, director Charlie Green said in an interview. The buyout firm bought the business for 393 euros in February 2002 from the former Swissair Group.
The disposal, together with the sale of a stake in casino and bingo-hall operator Gala Group Holdings Plc, announced last week, will result in an increase of 77 pence a share in the net asset value of Candover, the firm said.
Swissport, which operates in 40 countries, had revenue of 836 million euros last year, 25 percent more than when Candover bought the business, Green said. About 90 percent of sales come from Europe and North America, with Swiss International Air Lines Ltd., the successor to Swissair, the company's biggest customer.
Ferrovial is already involved in managing of airports in Bristol, England, and Sydney, Australia, and runs toll roads in Toronto, Chicago and Ireland. The company last month bought U.S.-based Webber Group for $220 million to help undertake work on a 1,300 kilometer (806-mile) Texas highway project.
To contact the reporter on this story:
Joao Lima in Madrid at jlima1@bloomberg.net.
Paul Tobin in Madrid at ptobin@bloomberg.net.
©2005 Bloomberg L.P. All rights reserved :
posted by Porkus Maximus Tex: at Monday, August 22, 2005
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