Disposal of Serco's Technical Services business
Disposal of Serco's Technical Services business
29 June 2012
Further to the announcement of 23 May 2012, Serco Group plc (Serco), the
international services company, announces today that it has completed the
transaction with AMEC plc for the sale of Serco's Technical Services (TS)
business for cash consideration of £137m. The transaction is in line with
Serco's stated strategy to proactively manage its portfolio of contracts,
assessing operations for strategic fit together with their expected future
levels of performance and returns.
Serco's TS business provides consulting and project solutions primarily to the
UK civil and nuclear defence markets, and has a diverse customer base covering
the majority of UK nuclear sites. The business has around 600 employees, most
of whom are nuclear qualified and experienced personnel. Under Serco's
continued ownership the business was expected to achieve limited future revenue
growth in a highly competitive market, where future growth is likely to be more
orientated toward the civil market and in particular the build of new nuclear
power stations. Therefore an integrated engineering company such as AMEC plc
will be better placed to benefit from this shift, given the breadth of their
support to the energy market.
For the year to 31 December 2011, the financial result for TS was approximately
£70m of revenue and £13m of Adjusted operating profit. The disposal proceeds of
£137m therefore represent a multiple of around 10.5 times Adjusted operating
profit. The disposal will have a small dilutive impact on Adjusted earnings.
The provisional value of net assets being disposed of is approximately £75m,
which includes goodwill of £64m. The provisional accounting profit on disposal,
after disposal-related costs of around £3m, is therefore expected to be
approximately £60m.
Christopher Hyman, Chief Executive of Serco Group, said: "I would like to thank
our colleagues for their hard work and commitment whilst part of Serco,
however, as we take Serco forward, this area of the business has become
non-core to the future development of the Group. We will continue to serve the
defence and science sectors, notably AWE and the National Nuclear and National
Physical laboratories, as well as developing our proposition in energy
management services. We believe a higher strategic value for these specialist
consulting skills can be achieved under alternative ownership, leaving Serco to
focus on our long-term contract model delivering high quality and efficient
services. We will seek to favourably reinvest by selecting the best
opportunities and continue to build a balanced portfolio of contracts in
markets and geographies around the world."
Ends
For further information please contact Serco:
Stuart Ford, Head of Investor Relations T +44 (0) 208 334 4122
Marcus De Ville, Head of Media Relations T +44 (0) 208 334 4388
Notes
Adjusted operating profit and Adjusted profit before tax are before
amortisation of intangibles arising on acquisition, acquisition-related costs,
and profits and losses on business disposals, as shown on the face of the
Group's consolidated income statement and the accompanying notes. For Adjusted
earnings per share it is also before tax arising on the adjusting items.
About TS
Technical Services (TS) provides consulting and project solutions primarily to
the UK civil and nuclear defence markets, and has a diverse customer base
covering the majority of UK nuclear sites. The business has around 600
employees, most of whom are nuclear qualified and experienced personnel.
Key service lines include: technical and engineering support services to
existing operating and new build nuclear power stations, including safety case
consulting and structural integrity testing; analysis and consulting in respect
of waste management and related services to the UK Nuclear Decommissioning
Authority and international customers; independent nuclear safety assessment
services for the UK submarine propulsion programme; and the ANSWERS Software
Service, providing predictive physics and software consultancy to assess
nuclear safety, plant performance and operational efficiency across the nuclear
fuel cycle.
About Serco
Serco is a FTSE 100 international service company, which combines commercial
know-how with a deep public service ethos.
Around the world, we improve essential services by managing people, processes,
technology and assets more effectively. We advise policy makers, design
innovative solutions, integrate systems and - most of all - deliver to the
public.
Serco supports governments, agencies and companies who seek a trusted partner
with a solid track record of providing assured service excellence. Our people
offer operational, management and consulting expertise in the aviation, BPO,
defence, education, environmental services, facilities management, health, home
affairs, information and communications technology, knowledge services, local
government, science and nuclear, transport, welfare to work and the commercial
sectors.
More information can be found at www.serco.com
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