Balfour Beatty closes in on Multibuild deal

As Building went to press on Wednesday, Balfour was poised to sign a deal for Multibuild, which would involve it taking on the construction capabilities of the failed £70m-turnover, Stockport-based company.

It is understood that Mike Peden, Multibuild’s chief executive, will move to Balfour Beatty, but that Tony Short, his business partner and co-founder, will remain with the parts of the business not taken on, including some small fit-out operations.

According to its last accounts, Multibuild employed 156 people.

The deal will give Balfour Beatty a stronger presence in the budget hotels sector, where Multibuild works with companies such as Whitbread and Travelodge. It will also boost its capability on large interiors projects. The acquisition is expected to be completed for a sum of less than £10m.

Multibuild is currently in a company voluntary arrangement (CVA) after it ran into financial difficulties. A creditors’ meeting was due to be held on Thursday by Leonard Curtis, the insolvency firm running the CVA, to discuss payments owed to Multibuild’s supply chain.

The original CVA agreement stated that the return to creditors would be up to 31 pence in the pound, but one subcontractor was later told that anyone expecting the maximum amount was living in “cloud-cuckoo-land”. Subcontractors were instead advised to expect 10 pence to the pound, but that may change with the acquisition.

One subcontractor said: “We’re worried. The Multibuild structure is very complicated, and we don’t want the profitable work being shifted to Balfour, leaving the parts with nothing on the books. We’re worried that the creditors will get nothing back from the CVA in that situation.”