Intermoney | ACS (ACS) (Buy, Target Price 40 euros/share) would have reached an agreement with the Texas Transport Department (TxDOT) related to the contract to renovate a bridge in Corpus Christi, according to the daily Cinco Dias. The investment required is 1 billion euros.
The initial contract had been signed in 2015, but since then various problems with the design have appeared which have delayed the work being carried out. Faced with complaints from the Texas Administration, ACS CEO, Juan Santamaría, appears to have calmed the situation, easing the disagreements which had arisen over the last few months. The bridge in question, which would be the fifth largest in the US of its kind, is a vital piece of infrastructure to access what is also one of the biggest ports in the country.
Valuation:
It’s frequent, and perhaps almost inevitable, for problems to arise in such complicated construction work contracts as this one appears to be. One of the tasks of the managers of construction firms is, precisely, to pour oil on troubled waters in this kind of situation. The TxDOT is a particularly important client for ACS, given that, for example, the construction firm has just invested 800 million euros to take control of the SH288 concession, promoted by the TxDOT. This is a contract which should generate consolidated EBITDA of some 60 million euros a year from 2023e. Meanwhile, the US is ACS’ main market in terms of revenues, making up over 30% of the total.
