US-based Hill International has entered into a definitive stock purchase agreement to sell its construction claims group to Bridgepoint Development Capital, part of international private equity group Bridgepoint, for $147 million in an all-cash transaction.

The move turns Hill, which operates extensively in the Middle East, into a pure project management business.

“Our construction claims group was the original business that began Hill more than four decades ago. We will miss our friends and colleagues in that business but we know that each of us will be in a better position to grow our two distinct businesses as independent and separate companies,” said David Richter, chief executive officer, Hill International. “This transaction transforms Hill into a pure-play project management firm with a significantly stronger balance sheet.”

The transaction is expected to close in approximately 60 days, subject to certain closing conditions.

Hill’s construction claims group has about 960 professionals in 40 offices worldwide, and provides claims consulting, management consulting, litigation support, expert witness testimony, cost/damages assessment, delay/disruption analysis, adjudication, lender advisory, risk management, forensic accounting, fraud investigation, project neutral and international arbitration services.

For the twelve months ended 30 September 2016, the construction claims group achieved consulting fee revenue of $163.1 million and operating profit of $11.1 million.

Net proceeds from the sale will be used primarily to pay off and retire Hill’s outstanding senior debt, which currently totals $145.8 million (but which is expected to be lower by closing), for which Hill incurred interest expense of $13.5 million during the twelve months ended 30 September 2016.

Hill has won a number of contracts in the region in recent months. In early December it was awarded a contract from the General Services Unit (GSU) of Abu Dhabi National Oil Company (Adnoc) to provide facilities management services for the entire portfolio of Adnoc facilities.

Hill says the three-year contract is worth about AED57m ($15.5m).