McConnells follow up Harker deal with Hawkins sale to Downer

Downer EDI Ltd has signed an agreement to acquire the construction, infrastructure & project management businesses of the Hawkins Group from the McConnell family.

In a separate transaction, the McConnell family sold the Harker Underground business to Australian company Abergeldie Complex Infrastructure and the Harker family 5 weeks ago. That transaction was due to be completed on 28 February.

The Downer transaction, announced on Wednesday, is due to be completed on 31 March. Downer chief executive Grant Fenn said Hawkins would continue to operate under its current brand.

Mr Fenn said Downer had become a leading provider of services in a range of markets, including transport, telecommunications & water. In Australia it has a major focus on the mining sector.

In New Zealand & the Pacific, Mr Fenn said Hawkins’ construction & infrastructure divisions would complement Downer’s engineering, construction & maintenance capabilities and provide a platform for growth: “It is estimated that over $50 billion will be invested in non-residential construction in New Zealand over the next 5 years.”

Mr Fenn said Downer would fund the acquisition through existing debt facilities and it would be earnings-accretive in its first year. He didn’t put a price on the transaction.

Hawkins has a number of high profile projects underway, including the construction of Auckland’s Park Hyatt Hotel in the Wynyard Quarter in a joint venture with China Construction for the Fu Wah International Group. Other Hawkins projects are the State Highway 16 Lincoln-Westgate upgrade, the pier B extension at Auckland Airport, the Rongotai control tower at Wellington Airport, Wellington City Council’s Arlington housing project, the Christchurch Town Hall and the Avon River precinct.

Both groups have long NZ histories

Downer has a New Zealand history dating back to 1933 though it’s based in Australia now, and Hawkins’ history dates back to 1946, when Fred Hawkins formed his building company in the Waikato.

McConnell Dowell Corp (MacDow), headed by Malcolm “Buck” McConnell & Jim Dowell, was backed into Hawkins Construction in a reverse takeover in 1982. MacDow went on to become an international business and international ownership, and is now owned by South African company Aveng Ltd.

From 1994-2000, the McConnell family – Buck McConnell’s sons David & John and daughter Nancy – bought back control of Hawkins Construction, then added an infrastructure division in 2007 and the underground drilling business, Harkers, in 2012.

On 2 February, Hawkins sold Harker Underground Ltd to Australian shaft & tunnelling company Abergeldie Complex Infrastructure and the family of former owner Graeme Harker.

Abergeldie Harker Ltd will be 80% owned by Abergeldie, 20% by Graeme Harker’s son Mike. Mike’s brother Phillip will also remain a key staff member.

Abergeldie founder & executive chair Mick Boyle said the purchase would strengthen tunnelling & shaft capabilities in both New Zealand & Australia “and make us leaders in both countries”. Abergeldie Harker would also bring to the New Zealand market some niche capabilities that Abergeldie has developed, such as shaft sinking by blind boring, pipe relining, excavation by blasting and capabilities in the water & rail sectors.

Harker national manager Matt Mules has been appointed general manager of Abergeldie Harker.

Links:
Downer Group NZ
Hawkins
Abergeldie Harker
MacDow

Attribution: Company releases, Companies Office.

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