David Prosser: Balfour Beatty builds itself a global future

Outlook Balfour Beatty's origins lie in the days of empire, when it exported its engineering and construction skills to Britain's colonies and dependencies around the world. In recent times, Balfour has been a little more parochial, but yesterday's deal to buy America's Parsons Brinckerhoff will once again give it a much greater presence on the global stage, increasing the business's exposure to the US by a third.

That's in keeping with chief executive Ian Tyler's ambition to achieve much greater geographical diversification. And it's a sensible strategy – US fiscal stimulus money is working its way through to construction projects just as the UK looks set to rein-back on large-scale public spending projects.

Not that Balfour is short of work on this side of the pond, busy at it is widening London's orbital motorway and with Olympics construction contracts such as the aquatic centre. Its maintenance business also offers some protection from a construction downturn.

While this acquisition is Balfour's biggest ever deal, shareholders are likely to support the £353m rights issue planned to pay for it, with the company's strong balance sheet and growth having sheltered them from the worst effects of the recession so far. After all, this is a cash call to fund expansion, not the sort of rescue rights issue seen elsewhere in recent months.

Nor will the markets be disappointed to see another takeover looming into sight, albeit not quite on the scale of Kraft's putative bid for Cadbury or the UK merger of T-Mobile and Orange. Good to see that Balfour is doing its bit to build confidence in the increasingly optimistic M&A market.