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Creation Date: Tue, 21 Dec 2010 GMT

Lend Lease buys Bilfinger unit for $960m

Developer Lend Lease Group says it has purchased engineering and construction business Valemus Australia, the local arm of German constructor Bilfinger Berger, for $960 million.

Lend Lease confirmed last week that it was in discussions with Bilfinger Berger about the purchase of Valemus, which is the parent company of Abigroup, Baulderstone and Conneq.

Bilfinger Berger set up Valemus in 2004 as a holding company of its local interests.

Advertisement: Story continues below The company said in a statement the acquisition would be funded from cash reserves and a new five-year $225 million debt facility.

It expected its current investment grade credit rating with S&P and Moody's would be maintained following the acquisition.

The transaction required regulatory approval and was expected to be completed during the first three months of calendar 2011, Lend Lease said.

Lend Lease Group chief executive and managing director Steve McCann said Valemus provided the company with an excellent strategic platform in the Australian engineering and construction market.

Valemus had a successful and experienced management team with diverse sector expertise that will add to the depth of our Australian management and broaden our skill set in the construction sector, Mr McCann said.

‘‘Valemus has in excess of $5 billion in total secured revenue with an extensive pipeline of further opportunities and a high proportion of government customers.''

Lend Lease retained financial flexibility to fund the group's ‘‘significant development pipeline''.

The acquisition was expected to ‘‘circa 15 per cent'' earnings per share accretive on a full year basis in financial year 2011/12, Lend Lease said.

‘‘The acquisition of Valemus will increase Lend Lease's capabilities and activities in the engineering and construction market and diversify Lend Leases position in this sector.''

Bilfinger Berger had planned to list Valemus this year, but postponed the initial public offer in July due to what it said was adverse capital market conditions.

The listing was originally projected to be worth as much as $1.39 billion.

'The Sydney Morning Herald', 21 December 2010