Lendlease has sold its Services business for $310 million.
The group said the deal is part of a strategy to focus on areas where its competitive edge is strongest.
The buyer, Service Stream, added it expects the equity purchase price after adjusting for debt and debt-like terms will be $295m.
It will fund the acquisition through debt facilities and recently launched $185m capital raising.
The Lendlease business provides Operations and Management and specialist Design and Construction services across utilities, transportation and telecommunication sectors.
“Lendlease Services provides a comprehensive range of specialist capabilities, supporting critical infrastructure at each stage of its life cycle,” a Service Stream statement said.
“The business holds a strong portfolio of client contracts with asset owners, operators, government and government related entities, with many longstanding relationships maintained over successive renewal periods…some exceeding 20 years,” according to the buyer.
“The business has a national presence with an experienced management team and skilled workforce of more than 2200 employees and access to a pool of skilled subcontractors,” it added.
Service Stream managing director Leigh Mackender said “in line with our stated strategy, the acquisition of Lendlease Services marks an exciting chapter…transforming the business into a diverse, multi-network essential service provider, operating across the growing infrastructure services sector” (story continues below).
Settlement is expected around November 2021.
Lendlease tried to sell the Services division two years ago – at the same time it offloaded its Engineering arm to Acconia for $180m.
“The divestment of the Services business, along with other recent divestments including…the US Telecommunications and Energy business, aligns with the group’s strategy,” recently appointed global chief executive officer, Tony Lombardo, said.
“The divestments, combined with recently announced changes to the organisational structure, better position the group to deliver on our $110 billion development pipeline, continue to deliver our construction backlog and grow our Investments platform in a more focused and efficient way,” according to the executive.
Lendlease Services managing director Toby Matthews added “Service Stream is a leader in the sector, and our skilled workforce, customer relationships and extensive workbook will significantly expand its operations across Australia”.
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