Andrew Roberts bows out of construction with sale of Roberts Co to Arada for nominal sum
The Roberts Co name will continue but the property scion behind it will turn his attention to other fields once he has done all he can do right the company’s collapsed Victorian projects.
Business tycoon Andrew Roberts will end his involvement in the construction sector with the sale of the NSW operation of the Roberts Co building business to Middle Eastern company Arada for a nominal sum.
The move comes in the wake of the company’s Victorian arm falling into administration owing creditors about $272m after it was hit by heavy cost overruns on four major projects, which weighed on the profitable NSW division.
While the transaction will take Mr Roberts, with an estimated fortune of $896m, out of the industry, Arada has ambitions to expand the Roberts Co platform in the state, where it is a tier-one commercial and residential contractor, with the Middle Eastern group also able to use it on its own mixed-use developments.
It is a bittersweet exit for Mr Roberts, who worked with his legendary father John in transforming Multiplex from a West Australian-turned national builder into an international real estate funds manager, landlord and builder.
In a tumultuous period beginning in the 1990s, the younger Mr Roberts helped drive the business into the British market and into deals around the world. The Multiplex Group listed on the Australian stock exchange in 2003.
Investors were burnt by the famously costly construction of London’s Wembley stadium. But the younger Mr Roberts stuck to the course, and he, alongside siblings Tim and Denby, sold out to Canadian giant Brookfield on the eve of the Global Financial Crisis, when Multiplex had an enterprise value of close to $8bn.
His re-entry into the construction field in 2017, initially with Italian giant Impresa Pizzarotti, was primarily as an investor as he backed some top former Multiplex executives to set up what would become a major tier-one builder. It shook up a building scene that had been dominated by institutions, entering a variety of fields ranging from health, commercial, education works, along with residential building, as well as introducing revolutionary ways of working.
But it was brought unstuck in Victoria, where a combination of project delays and cost blowouts ate into company resources, draining the more successful NSW operations. The sudden shift in a business that ran on thin margins led to Mr Roberts shaking up the board and management last year and then taking on a more active role as proprietor in an effort to break the logjam on major construction jobs.
While the company as a whole could not be saved, with the Victorian unit in the arms of administrators McGrathNicol and negotiations under way with major developers to get jobs back on track, the sale of the NSW operation to Arada salvages the valuable business created over the past eight years.
Mr Roberts remains a substantial investor in fields ranging from funds management to property development and will continue to focus on these areas after exiting the construction company.
He and senior members of the remaining Roberts Co team are focused on working with administrators on agreements that will see subcontractors paid on the Victorian projects. The builder could finish off some works or put projects in a position where they can be handed to other contractors.
Mr Roberts is well known in the tight-knit construction industry and may work behind the scenes, as he did when the company first ran into strife. His decision to exit construction after almost a lifetime of involvement was difficult, but getting the Victorian operation back on track after its sudden decline was beyond a private capital player.
The sale to Arada will mean that the Roberts Co name will remain active in NSW initially and perhaps more broadly in future given the buyer’s ambitions. It may even grow to rival the Multiplex operation that remains a top builder in an unrelenting sector.
But it will also mean the famed Roberts family will no longer have a direct stake in the industry in which its fortune was founded.
Roberts Co and tycoon declined to comment, but the Middle Eastern company confirmed it had struck a deal, after seeing off interest from rivals that also made approaches for the company.
The UAE-based Arada launched into the Australian property market last year and has plans for multiple projects across NSW, with a local development pipeline of about $2.5bn.
The Middle Eastern property player, which has built 9000 homes and has another 21,000 in the pipeline in its home market, has already outlaid $200m on about five sites in NSW. It is led by its Australian-born chief executive, Ahmed Alkhoshaibi.
“We can confirm that Arada and Roberts Co Australia have entered into an agreement for the sale of Roberts Co NSW,” Arada said. “Completion remains subject to certain conditions precedent being satisfied. An announcement in accordance with regulatory requirements will be made once all conditions have been met.”
Originally published as Andrew Roberts bows out of construction with sale of Roberts Co to Arada for nominal sum
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