Update on DMS Maritime
Update on purchase of remaining stake in Australian defence and marine services
joint venture
20 February 2013
Serco Group plc (Serco), the international services company, provides today an
update on its recent purchase of DMS Maritime Pty Ltd. The required valuations
have now been completed. These are expected to result in a non-cash exceptional
gain of £51m.
Serco announced on 7 November 2012 that it had signed an agreement to purchase
the remaining 50% equity stake in DMS Maritime from its joint venture partner P
&O Maritime Services. It was subsequently announced on 20 December 2012 that
the transaction had completed at an acquisition cost of £82m, comprising cash
consideration paid of £69m and incremental net debt acquired of £13m.
As Serco obtained control of DMS Maritime on the purchase of the remaining
equity stake, step acquisition accounting, in accordance with IFRS 3 (Revised
2008) - Business Combinations, is applied. The previously held 50% equity
interest is treated as if it was disposed of and re-acquired at fair value on
the acquisition date. Accordingly, it is re-measured to its acquisition date
fair value, with the resulting gain compared to its book value recognised in
the consolidated income statement. This is expected to result in a £51m
non-cash exceptional gain in Serco's 2012 results. The overall balance sheet
effect of the acquisition is therefore expected to result in recognition of £
120m of net assets. The valuation is subject to final confirmation as part of
the audited results for the 2012 financial year, which will be announced on
Tuesday 5 March 2013.
DMS Maritime is one of Australia's largest marine service operators, with
facilities in every major port and a technical support network that extends a
wide range of engineering and technical services across Asia Pacific. The DMS
Maritime purchase strengthens Serco's position as a leading defence services
provider and in the growing marine services market.
For the year to 31 December 2012, DMS Maritime had revenues of approximately £
80m and underlying operating profit of approximately £12m; Serco will
consolidate the remaining 50% stake it has purchased. Expectations are for
continued good revenue growth and for margins to be maintained. DMS Maritime
has an order book of over £500m; Serco will include within its order book the
additional 50% that it now owns.
Christopher Hyman, Chief Executive of Serco Group plc, said: "Our original
shareholding in DMS Maritime was made 15 years ago when we first established
the joint venture to provide a complex range of harbour and offshore services
for the Royal Australian Navy. DMS Maritime is a high quality business that
shares Serco's commitment to customer focus, has grown well and will be further
enhanced under our full ownership. We believe that it will benefit from the
continuing development of our defence business in the region from a base
support services provider to a complex services integrator, and from the
significant opportunities that we see in the marine systems integration and
services market - both for government and private sector customers."
Ends
For further information please contact Serco:
Stuart Ford, Head of Investor Relations T +44 (0) 1256 386 226
Marcus De Ville, Head of Media Relations T +44 (0) 1256 386 227
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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