Hill International Agrees to Sell Construction Claims Group to Private Equity Firm Bridgepoint in $147 Million All-Cash Trans...
December 20 2016 - 8:00AM
Hill International (NYSE:HIL), the global leader in managing
construction risk, announced today that it has entered into a
definitive stock purchase agreement to sell its Construction Claims
Group to Bridgepoint Development Capital, part of international
private equity group Bridgepoint, for $147 million in an all-cash
transaction. The transaction is expected to close in
approximately 60 days, subject to certain closing conditions.
Hill’s Construction Claims Group, with
approximately 960 professionals in 40 offices worldwide, provides
claims consulting, management consulting, litigation support,
expert witness testimony, cost/damages assessment, delay/disruption
analysis, adjudication, lender advisory, risk management, forensic
accounting, fraud investigation, Project Neutral and international
arbitration services.
For the trailing twelve months ended September
30, 2016, Hill’s Construction Claims Group achieved consulting fee
revenue of $163.1 million (which was 26.3% of Hill’s consolidated
consulting fee revenue during that period) and operating profit of
$11.1 million. Net proceeds from the sale will be used
primarily to pay off and retire Hill’s outstanding senior debt,
which currently totals $145.8 million (but which is expected to be
lower by closing), for which Hill incurred interest expense of
$13.5 million during the trailing twelve months ended September 30,
2016. The transaction is expected to be principally tax-free
to Hill in the United States as a result of the company’s
significant net operating loss carryforwards.
“Our Construction Claims Group was the original
business that began Hill more than four decades ago. We will
miss our friends and colleagues in that business but we know that
each of us will be in a better position to grow our two distinct
businesses as independent and separate companies,” said David L.
Richter, Hill’s Chief Executive Officer. “This transaction
transforms Hill into a pure-play project management firm with a
significantly stronger balance sheet,” added Richter.
“The acquisition of Hill’s Construction Claims
Group provides the opportunity to back a business that is highly
regarded by its clients, in a primary buyout of a global leader
serving a growing market,” said Alan Payne, Partner with
Bridgepoint Development Capital. “Under new ownership, the
company will now focus on driving performance by improving its
operations, making targeted acquisitions as it further consolidates
its market and by continuing to develop additional adjacent service
offerings for its clients,” added Payne.
Hill was assisted on the transaction by
financial advisor KeyBanc Capital Markets Inc. and legal advisor
Duane Morris LLP. Bridgepoint was assisted by financial
advisor E&Y and legal advisors Travers Smith LLP and Choate
Hall & Stewart LLP.
David Richter and John Fanelli III, Hill’s
Executive Vice President and Chief Financial Officer, will host a
conference call later today at 11:00 am Eastern Time to discuss the
transaction and its impact on the company. Interested parties
may participate in the call by dialing (877) 423-9820 (Domestic) or
(201) 493-6749 (International) approximately 10 minutes before the
call is scheduled to begin and asking to be connected to the Hill
International conference call. To listen to the live call
online, please go to the “Investor Relations” section of Hill’s
website at www.hillintl.com and click on “Financial Information,”
and then “Conferences and Calls.” Please go to the website at
least 15 minutes early to register, download and install any
necessary audio software. If you are unable to participate in
the live call, the conference call will be archived and can be
accessed for approximately 90 days.
Bridgepoint is a major international private
equity group with more than €13 billion ($14.7 billion) of
committed capital focused on investing in market-leading
businesses, working with management teams to create and realize
value within its portfolio companies. Its middle-market
affiliate Bridgepoint Development Capital is a dedicated team
focused on buyouts and growth capital investments, typically in
businesses that have the potential for value creation through
organic growth, acquisitions and operational improvement. For
more information on Bridgepoint, please visit their website at
www.bridgepoint.eu.
Hill International, with 4,400 professionals in
100 offices worldwide, provides program management, project
management, construction management, construction claims and
other consulting services primarily to the buildings,
transportation, environmental, energy and industrial
markets. Engineering News-Record magazine recently
ranked Hill as the eighth largest construction management firm in
the United States. For more information on Hill, please visit
our website at www.hillintl.com.
Certain statements contained herein may be
considered “forward-looking statements” within the meaning of the
Private Securities Litigation Reform Act of 1995, and it is our
intent that any such statements be protected by the safe harbor
created thereby. Except for historical information, the
matters set forth herein including, but not limited to, any
projections of revenues, earnings or other financial items; any
statements concerning our plans, strategies and objectives for
future operations; and any statements regarding future economic
conditions or performance, are forward-looking statements.
These forward-looking statements are based on our current
expectations, estimates and assumptions and are subject to certain
risks and uncertainties. Although we believe that the
expectations, estimates and assumptions reflected in our
forward-looking statements are reasonable, actual results could
differ materially from those projected or assumed in any of our
forward-looking statements. Important factors that could
cause our actual results to differ materially from estimates or
projections contained in our forward-looking statements include the
possibility that various closing conditions for the sale of the
Construction Claims Group may not be satisfied or waived, that
there may be adverse effects or disruption from the sale that
negatively impact Hill’s remaining business or other risks as well
as the other factors which are set forth in the Risk Factors
section and elsewhere in the reports we have filed with the
Securities and Exchange Commission, including that unfavorable
global economic conditions may adversely impact our business, our
backlog may not be fully realized as revenue and our expenses may
be higher than anticipated. We do not intend, and undertake
no obligation, to update any forward-looking statement.
Hill International, Inc.John P.
PaolinSenior Vice President of Marketing andCorporate
Communications(215) 309-7710johnpaolin@hillintl.com
The Equity Group Inc.Devin
SullivanSenior Vice President(212)
836-9608dsullivan@equityny.com
(HIL-G)