Drake & Scull, the Dubai-based engineering firm, is in final negotiations to acquire two construction companies.
Drake & Scull in final talks to buy two companies
Drake & Scull, the Dubai-based engineering firm, is in final negotiations to acquire two construction companies as it seizes expansion opportunities in the economic downturn. The company, which has more than Dh5 billion (US$1.36bn) worth of projects across the Middle East and North Africa, has weathered the downturn better than many, mainly thanks to its spread of contracts across different sectors of the construction industry and an under-reliance on residential property work. While other firms in the sector have shed staff, it has spent the last six months stepping up its recruitment drive, hiring 300 people for its unit in Saudi Arabia.
Now it aims to take advantage of the global recession to buy companies that are undervalued and strengthen its capacity in infrastructure, water and power, where regional governments in particular are continuing to spend. The board of directors gave the move the green light earlier this week, according to Khaldoun Tabari, the vice chairman and chief executive. "We will acquire two companies in the coming two months," he said.
Drake & Scull has a cash pile estimated earlier this year at Dh1.1 billion to fund the acquisitions. It listed on the Dubai Financial Market in March and was the only company to do so during the first half of this year. Having listed at Dh1, its shares closed on Thursday at Dh0.84. Last month the firm was awarded a Dh528m contract to provide services for Lamar Towers, a project by Cayan Investment and Development under construction in Saudi Arabia. Drake & Scull is also working on a Dh734m contract for Saudi Aramco.
The company is targeting contracts in North Africa as part of its expansion plans. It is currently working on a contract to build a district cooling plant in Sudan and is bidding for work in Libya. email@example.com