Philadelphia and London — In late December, Hill International announced that it 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 12 months ended September 30, 2016, Hill’s Construction Claims Group achieved consulting fee revenue of $163.1 million (which was 26.3 percent 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 12 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.