Hill International, a global leader in managing construction risk, said it has entered into a definitive stock purchase agreement to sell one of its key units - Construction Claims Group - to Bridgepoint Development Capital, part of international private equity group Bridgepoint, for $147 million in an all-cash transaction.

With 960 professionals in 40 offices worldwide, the company 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.

The transaction is expected to close in approximately 60 days, subject to certain closing conditions, said a statement from Hill.

For the trailing 12 months ended September 30, 2016, Hill's Construction Claims Group achieved consulting fee revenue of $163.1 million, about 26.3 per cent of Hill's consolidated consulting fee revenue during that period) and operating profit of $11.1 million.

Net proceeds from the sale will be used primarily to pay off and retire Hill's outstanding senior debt, which currently totals $145.8 million (but which is expected to be lower by closing), for which Hill incurred interest expense of $13.5 million during the trailing twelve months ended September 30, 2016, said the top company.

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 carryforwards, it stated.

Commenting on the move, CEO David L. Richter 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," he added.

Hill was assisted on the transaction by financial advisor KeyBanc Capital Markets and legal advisor Duane Morris, while Bridgepoint got the help of financial advisor E&Y and legal advisors Travers Smith and Choate Hall & Stewart.

"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," remarked Alan Payne, a partner with Bridgepoint Development Capital.

Bridgepoint is a major international private equity group with more than €13 billion ($14.7 billion) of committed capital focused on investing in market-leading businesses, working with management teams to create and realize value within its portfolio companies.

"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," added Payne.-TradeArabia News Service