Webuild reaches an agreement to acquire assets from Clough

australia, Clough, Inland Rail, snowy hydro, Webuild,

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Offer accepted by Clough covers the acquisition of selected assets, including its people, brands, business references, the organisation, and certain projects.

As already communicated to the market, on 8 November 2022, Webuild signed a sale and purchase agreement (“SPA”) with the South African company Murray & Roberts for the acquisition of 100% of Clough, subject to certain conditions precedent (including in particular, the positive outcome of the due diligence and the provision of sufficient collateral for an interim loan to be provided by Webuild to Clough before completion of the acquisition).

These conditions precedent were not met and, as a result, on 5 December 2022, Webuild and Murray & Roberts jointly agreed to terminate the SPA informing the market of their decision. Clough was thus placed in voluntary administration as its ability to continue as a going concern was dependent on third-party funding which Murray & Roberts had stated it could not supply. 

Clough’s directors have appointed Sal Algeri, Jason Tracy, David Orr and Glen Kanevsky of Deloitte as Administrators effective immediately, and they now become responsible for the company’s affairs. Whilst responsibility for the management of Clough has now passed to the appointed Administrators, they will no doubt rely heavily on assistance from the Board and Management in exploring options for restructuring and recapitalisation of the company.

The process also allows compromise with creditors through adoption of a Deed of Company Arrangement, a binding arrangement between the company and its creditors governing how the company’s affairs will be dealt with.

Agreement reached with the Administrators of Clough 

In this context, as its strategic rationale behind the agreement with Murray & Roberts was still valid, Webuild immediately began negotiations with Clough Administrators leading to an agreement that covers:

  • The acquisition of a base perimeter comprising Clough’s Australian organisation (offices, brand, credentials, business references, senior management, office personnel, etc.) and its share of the Snowy 2.0 and Inland Rail contracts (with the related workforce), where Clough is Webuild’s partner, for a total transaction consideration of AUD 17.6 million (plus the assumption of employee liabilities); 
  • The option to extend the transaction scope to include other projects if accretive conditions for the Group are guaranteed, consistently with its financial objectives, with additional consideration payable should that option be exercised; 
  • An exclusivity period up until 21 December 2022 for Webuild, to define and agree the final contract relating to reached agreements. 

In addition to obtaining the minority stakes in projects carried out with Clough in Australia, the transaction will allow Webuild to bolster its local organisation, engineering expertise and workforce, which is instrumental to the execution of its order backlog and commercial plan. 

Australia is currently Webuild second largest market after Italy with an order backlog of €8.9 billion, including projects for which Webuild is the preferred bidder, and a workforce of more than 1,800 people. This dynamic market has seen Webuild build iconic projects, such as the Perth Airport Line, previously known as the Forrestfield-Airport Link, which was opened on October 9, 2022. Construction investments in the Australian market are expected to reach more than €300 billion in the 2022-2025 period. 

Clough, founded in Perth in 1919, is a major player in its sector and has a workforce of around 2,500 employees. It provides sustainable and innovative solutions in the design, construction and maintenance of plants and infrastructures. Its landmark projects include the first high-rise in Perth, and the first major underground freeway tunnel in Western Australia.

Source: © Webuild 2020 | © Clough 

Image source: © Clough 

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