Balfour Beatty buys Pennine & SBB

announced today that it has acquired

, the UK ground engineering business, for approximately £8 million and agreed to acquire SBB, the specialist German signalling contractor, for €14 million.

“The acquisition of Pennine gives us a strong, complementary presence in ground engineering. We can now offer the full range of foundation solutions in the UK,” commented Ian Tyler, Balfour Beatty Chief Executive. “The acquisition of SBB will offer us an important opportunity to broaden our signalling capability and to develop further our excellent existing relationship with Deutsche Bahn in Germany.”

Pennine operates throughout the UK and overseas and specialises in the treatment and preparation of poor ground by the use of specialist vibration techniques, using proprietary equipment that it also manufactures.

Balfour Beatty says that in the UK growth prospects for ground improvement are attractive. This has been driven by the trend to develop brownfield sites and increasing requirements for environmental remediation. The company also believes there is significant potential to expand Pennine’s operations overseas, including in the Middle East where ground conditions favour the technology used by Pennine.

In the financial year ending March 2005, Pennine, which employs 130 staff and is based at Bacup in Lancashire, had sales of £16 million and operating profit of approximately £1.5 million.

SBB will become a part of Balfour Beatty Rail Power Systems, Balfour Beatty’s Munich-based subsidiary which specialises in rail electrification and power systems for international rail markets.

SBB predominantly operates in the former East Germany, but has recently extended its operations in the west. The majority of its work is in the renewal and installation of signalling systems under existing framework contracts with Deutsche Bahn. In 2004, SSB had sales of approximately €10 million. The company has 85 employees and is based in Stassfurt near Leipzig.

The acquisition is subject to clearance from the German Cartel Office, which is expected in late August.