Acquisition of Esorfranki Geotechnical
For immediate release Wednesday, 9 October 2013
Keller Group plc
("Keller" or "the Group")
Acquisition of Esorfranki Geotechnical, South Africa
Keller (LSE: KLR), the international ground engineering specialist, announces that it has agreed to purchase the Geotechnical Division of the Johannesburg-listed civil engineering and construction company Esorfranki Limited (JSE: ESR) for an initial consideration of R500m (£31m).
Esorfranki Geotechnical is the largest ground engineering business in South Africa, offering design and build services to the mining, civil engineering and construction industries, and has a strong track record of executing projects in other Sub-Saharan African countries. In the year ended 28 February 2013, Esorfranki Geotechnical generated revenue of R788m (£49m), of which 46% was earned outside South Africa, and an underlying operating profit* of R53m (£3.3m). At 28 February 2013, the value of the gross assets to be acquired was R630m (£39m) and the business had net assets of R419m (£26m).
In addition to adding a market-leading business run by an experienced management team who will remain with the business, the acquisition will accelerate Keller's entry into selected sub-Saharan construction markets, where significant growth is expected over the medium to long term, fuelled by major infrastructure and resources-related projects. The business will form part of the Group's EMEA division.
The total consideration, to be paid in cash from Keller's existing facilities, will comprise an initial payment of R500m (£31m), on a debt and cash free basis, together with a maximum deferred consideration of R150m (£9.4m) dependent on the achievement of a certain level of profits over the three years following the acquisition.
Completion is expected by the end of November 2013 and is subject, inter alia, to approval by shareholders of Esorfranki Limited at its general meeting on 18 November 2013 and the approval of the South African Reserve Bank.
*: stated before a R24m (£1.5m) profit on the sale of a property
Justin Atkinson, Chief Executive of Keller, said:
"This important acquisition marks another milestone in our strategy of extending our global leadership by expansion into new, higher growth regions.
"The combination of Esorfranki Geotechnical's local knowledge and resources with Keller's scale, experience and broad range of techniques will make us ideally placed to undertake complex major projects requiring design expertise and multi-product solutions in a region where we expect the longer-term opportunities to be significant."
For further information, please contact:
Keller Group plc |
www.keller.co.uk |
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Justin Atkinson, Chief Executive |
020 7616 7575 |
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James Hind, Finance Director |
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Finsbury |
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Gordon Simpson, Rowley Hudson |
020 7251 3801 |
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Notes to Editors:
Keller is the world's largest independent ground engineering specialist, providing technically advanced and cost-effective foundation solutions to the construction industry. With annual revenue of around £1.5bn, Keller has approximately 8,000 staff world-wide.
Keller is the clear market leader in the US and Australia; it has prime positions in most established European markets; and a strong profile in many developing markets.
This information is provided by RNS
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