Webuild acquires Australia's Clough from Murray & Roberts

australia, Clough, murray & roberts, Webuild,

November 22, 2022

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Webuild reaches agreement with Murray & Roberts to acquire Clough, taking over the Snowy 2.0 and Inland Rail projects in Australia.

The Target

Clough is among Australia’s main companies in the engineering and construction sector, with approximately 2,500 employees. Founded in Perth in 1919, Clough is owned by Murray & Roberts of South Africa. It provides sustainable and innovative solutions in the design, construction and maintenance of plants and infrastructure in the energy, resources and infrastructure sectors. Its landmark projects include the first high-rise in Perth and Western Australia’s first major underground freeway tunnel.

On June 30, 2022, Clough had an order backlog of approximately €2.1 billion and about €2.7 billion worth of projects for which it is the preferred bidder. Both the backlog and preferred bids are mainly concentrated in Australia and North America. Revenues for the 2022 financial year are approximately €1 billion. In addition, the company ended 2022 with a balance sheet free of financial debt.

Webuild will support Clough’s financial reorganisation to turn it into the Group’s platform in Australia, a strategic market with solid growth potential as infrastructure investments are expected to reach more than €300 billion in the 2022-2025 period. In Australia, Webuild’s order book and preferred bids total nearly €9 billion.

Transaction Rationale

The transaction would enable Webuild to:

Strengthen its organisational, engineering and workforce structure in Australia, instrumental to the execution of its order backlog and commercial plan;
Bolster its local presence in several major Australian states, such as Western Australia and Queensland, adding to Webuild’s established presence in New South Wales and Victoria;
Benefit from scale and significant synergies by enhancing Clough’s central resources specialised in commercial planning, bid preparation, human resources management, procurement management, administration, finance and control;
Expand and diversify Webuild’s operating segments with Clough’s good market positioning and strong technical expertise in energy, installations, and defence sectors.

The transaction would have Webuild take over minority stakes in projects in Australia carried out in partnership with Clough, including Snowy 2.0 and Inland Rail.

Transaction Highlights

The agreement is subject, among other things, to the positive outcome of the due diligence (to be conducted promptly on Clough), all the necessary approvals from the relevant authorities, clients’ confirmation that Clough material contracts will continue unimpaired after the closing of the acquisition, and approval by the Murray & Roberts Holding Limited shareholders’ assembly. The structure of the operation also foresees Webuild granting an AUS $30 million (approximately €20 million) loan to Clough between the signing and closing, subject, among other things, to appropriate first-ranking security being in place to secure repayment if the transaction is not completed.

Due diligence has already commenced; the agreed scope will address standard legal, accounting, tax and operational matters and review the economic and financial forecasts made available to We build pending the transaction negotiation.