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Hill Intl to sell construction claims group

Hill International will sell the group in an all-cash transaction for $147m, with the deal expected to close in approximately 60 days

This image is used only for representation purposes.
This image is used only for representation purposes.

Hill International announced that it has entered into a conclusive stock purchase agreement to sell its construction claims group to Bridgepoint Development Capital for $147m in an all-cash transaction.

The transaction is expected to close in approximately 60 days, a company press statement said.

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 $163.1m (which was 26.3% of Hill's consolidated consulting fee revenue during that period) and operating profit of $11.1m.

Net proceeds from the sale will be used primarily to pay off and retire Hill's outstanding senior debt, which currently totals $145.8m (but which is expected to be lower by closing), for which

Hill incurred interest expense of $13.5m during the trailing twelve months ended September 30, 2016.

The transaction is expected to be principally tax-free to Hill in the US as a result of the company's significant net operating loss carry forwards, the statement said.

David L. Richter, Hill's chief executive officer said: "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.

"This transaction transforms Hill into a pure-play project management firm with a significantly stronger balance sheet.”

Alan Payne, partner with Bridgepoint Development Capital stated: "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.

"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.”

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