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Balfour buys US army housing business

Balfour Beatty is buying the military accommodation business of GMH Communities Trust the US real estate investment trust for £179 million.

The contractor said the acquisition of GMH Military Housing will enhance earnings and is central to implementing its strategy of building a high-quality, domestic US business.

The Philadelphia-based firm GMHMH develops and runs housing projects for the US military. It has so far won 15 military housing projects, of which three are at preferred bidder stage, and supplies development and property management services for those projects.

Balfour said the combination of the accommodation business with its Balfour Beatty Construction unit would create a comprehensive in-house construction, support services and finance operation supplying services to the US military and other markets.

Chief executive Ian Tyler said: "GMH will be an excellent springboard into other emerging PPP and support service sectors in the US market, will immediately enhance earnings and will generate significant value for our shareholders."

The deal is subject to certain US military division, funder and regulatory consents. Balfour said it will fund the buy from existing cash resources.