SUNBIZ

Fletcher Building To Buy Higgins Road Construction Company

Higgins Group Holdings Limited has signed a conditional agreement to sell its New Zealand and Fijian assets to Fletcher Building for NZ$315 million (FJ$450 million). Higgins’ ready-mix concrete and property
05 Feb 2016 09:43
Fletcher Building To Buy Higgins Road Construction Company
Fletcher Building

Higgins Group Holdings Limited has signed a conditional agreement to sell its New Zealand and Fijian assets to Fletcher Building for NZ$315 million (FJ$450 million). Higgins’ ready-mix concrete and property businesses are excluded from the transaction.

Higgins’ Fijian contracting business includes a contract by the Fiji Roads Authority for the construction and maintenance of our Western road network.

The agreement is conditional on a number of factors including Overseas Investment Office and Commerce Commission consent. The transaction is expected to be completed by around June 30.

Fletcher Building chief executive, Mark Adamson, said he was delighted that Fletcher Building had been able to conclude the transaction with the Higgins family.

“We have signalled for some time our desire to extend our activities into the road construction and maintenance sector, where we have identified significant opportunity,” he said.

“Higgins was a logical choice for Fletcher Building to talk with given our strong history of working together.

“We believe that a combination of Fletcher Building and Higgins will provide our customers with a stronger proposition for both new road projects and maintenance contracts.

“We also see further benefits for a number of group businesses in being able to work more closely with Higgins, and believe that we can derive further value from the acquisition through operational synergies.”

Mr Adamson believes Higgins has achieved strong growth in Fiji, and feels this business would complement their existing South Pacific construction activities.

“We will be looking to extend the sphere of operations beyond Fiji into other South Pacific territories over the next few years,” he said.

Meanwhile, Higgins chief executive, David Geor is expected to continue to lead the Higgins contracting business under the Higgins brand.

 

About Fletcher

Fletcher Building was awarded the multi-million-dollar Momi Bay Redevelopment project by the Fiji National Provident Fund in 2014.

Fletcher has been given strict timelines with the initial completion period to be within 24 months of starting construction.

Fletcher was awarded this contract noting its long-standing presence in Fiji.

Some major works carried out by Fletcher include the Fiji Airways new executive offices above the airline’s three-storey maintenance hangar in Nadi.

It also built the Nausori Bridge as well as Ba and Sigatoka bridges. Denarau Retails Centre and Fiji Water Bottling Factory expansion were also projects of Fletcher Building.

 

About Higgins

Higgins is the third largest participant in the New Zealand road construction and maintenance sector, and is integrated with its quarry operations.

The business has had a strong growth trajectory in recent years, driven by the expansion of its base from the lower North Island into the Auckland, Waikato, Bay of Plenty and Canterbury regions.

This has been augmented by strong growth in its Fijian operations, where two major contracts have been won. One of this is the construction of four lanes along the Queens Road in Nadi which includes the road outside the Nadi International Airport.

The acquisition will be funded from Fletcher Building’s existing cash and debt facilities.

Fletcher Building has partnered with Higgins on road construction projects for over 25 years, and has forged a close working relationship with the business over that time.

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