Budimex takes control of FBSerwis

On 2 July 2019. Budimex entered into an agreement with Ferrovial Services International SE to acquire 51% of the shares in FBSerwis S.A. for a price of PLN 98.5 million, and then on 3 July 2019. in performance of the above-mentioned agreement, Budimex concluded a disposition agreement with the seller, under which the seller transferred the right to the sold shares to Budimex.

As a result of the transaction, Budimex became the sole owner of FBSerwis. The acquisition of FBSerwis and the acquisition of control of the company is of a long-term nature and is part of the implementation of the Budimex Group’s development strategy based on building shareholder value through diversification of construction activities and development of the service business – says Dariusz Blocher – President of the Management Board of Budimex SA.

FBSerwis was established in 2012 as a joint venture of Ferrovial Services (a service division of the Ferrovial Group) and Budimex. The subject of FBSerwis’ activity is technical maintenance and modernization of buildings and industrial facilities, maintenance of road and urban infrastructure and waste management, as well as activities in the area of energy efficiency. In recent years, the company has been growing both organically and through acquisitions of other entities. Currently, the FBSerwis Group consists of FBSerwis S.A. as the parent company and 4 operating subsidiaries, which were acquired in 2015-2017. Currently, FBSerwis is implementing significant contracts commissioned by GDDKiA, including the ongoing maintenance of nearly 1.2 thousand. km of national roads and motorways. In addition, companies from the FBSerwis Group operate regional municipal waste processing installations (RIPOK) – in the province of Lub. Łódzkie, voivodship. Małopolskie and two in the Małopolskie Voivodeship. Lower Silesia, and also have two landfills.

Budimex’s intention is to further develop FBSerwis organically by leveraging the growing potential of the road infrastructure maintenance market. Forecasting the development of the market, Budimex will also support the development of FBSerwis in the waste management sector – adds Dariusz Blocher – because he expects that this market will be conducive to consolidation, and rising costs and increasingly stringent law will favor reliable and responsible companies such as FBSerwis. Budimex assumes that a significant increase in the scale of FBSerwis’ operations on the waste management market will require further acquisitions, in particular of entities owning regional municipal waste processing installations with their own landfills. Such acquisitions allow for better integration of the value chain and generation of higher profitability.

FBSerwis is consistently increasing the scale of operations and improving its profitability. The consolidated revenues of the FBSerwis Group for 2018 amounted to PLN 370 million and were over 40% higher than in the previous year. The Group generated EBITDA of PLN 49 million (nearly 90% higher than in the previous year) and operating profit (EBIT) of PLN 14 million compared to a loss of PLN 0.2 million in 2017. The preliminary results of the first quarter of 2019 of the FBSerwis Group also show positive dynamics and further improvement in profitability. At the end of March 2019, the FBSerwis Group employed nearly 1 thousand. Employees.

From the moment of the acquisition of 51% of FBSerwis shares, Budimex will start consolidating the results of the FBSerwis Group using the full method. The FBSerwis Group will be classified as an operating segment entitled: other activity, which will change its name to service activity.