High price ends Built’s talks on Multiplex deal

Part of the Star Entertainment project on the Gold Coast. Picture: Richard Gosling

NSW builder Built is understood to have held talks with Brookfield about acquiring its construction business Multiplex in recent months, according to sources.

However, the understanding is that a deal never progressed because the two parties could not agree on price.

Brookfield is understood to have been asking for more than $300m for the company, but Built was not prepared to pay up as the group continues to wrestle with challenging projects.

The talks come after Brookfield hired Morgan Stanley last year to weigh options for Multiplex, including a sale.

Accounts lodged with the Australian Securities and Investments Commission reveal that, for the year to December, the company generated $164m of gross profit – the same amount it made in 2021 – and comprehensive income of $83.2m, up from $57.2m in 2021.

For 2022, it generated almost $3.4bn of revenue.

Multiplex only had $1.2m of interest-bearing loans and borrowings, with almost $1.9bn of total equity.

The accounts show Multiplex held up well amid what had been a tough year when cost blowouts on its job building Star Entertainment’s new casino at Queen’s Wharf in Brisbane took its toll on the group.

Other issues surrounding contracts with the Sydney Fish Markets development job and the Western Sydney Airport terminal also weighed on its bottom line.

The builder is considered the best in class, meaning its private equity owner would hold out for a high price.

Built is a privately owned group that has grown to be a national diversified general contractor and one of Australia’s largest private construction groups.

It also operates in Britain and New Zealand, and in the past has considered an initial public offering.

Its annual revenue is $2.5bn and it carries out projects larger than $500m, with at least $4.5bn worth of work in hand.

Among its projects is Atlassian’s Australian headquarters in central Sydney.

The company was founded by executive chairman Marco Rossi.

Brookfield purchased Multiplex at the peak of the market in 2007 for $4.2bn and its desire was always to extract the property component from the business, with the construction arm being non-core.

A name change from Brookfield Multiplex back to Multiplex was taken by some as a signal that the private equity firm had been keen to distance itself from the business, as was its move to shift it into an entity that holds its private equity assets.

Generally speaking, construction companies are hard to sell – it’s a low-margin game, risky and the key aspect being acquired is a workforce.

Competitors also take the view that it is in many cases better to take contracts away from their rivals rather than buy the businesses as entire entities.

Multiplex was founded by John Roberts in Perth in 1962 and was listed as a public company in 2003, raising $1.2bn.

The business now has its headquarters in London and operates in Australia, India, Canada, Europe and the Middle East.

It specialises in high-rise buildings, stadiums, high-end residential projects and mixed-use, education, health and civil infrastructure developments.

Multiplex has delivered 1100 projects globally worth $US99bn ($152bn) collectively and is one of the most well regarded building companies in the market.

Its construction of London’s Wembley Stadium in 2007 resulted in project delays.

It has also built Perth Stadium, Perth skyscraper Brookfield Place, Melbourne Convention Centre, Gold Coast Convention & Exhibition Centre, Melbourne’s Federation Square and Sydney’s Stadium Australia.

Among its recent projects in Australia are The Ribbon building, NextDC Data Centre and the Quay Quarter, all in Sydney.