27th Mar 2014 08:57
LONDON (Alliance News) - Engineering support services company Babcock International Group PLC Thursday said it has agreed to buy helicopter form Avincis Group for GBP920 million from Investindustrial and Kohlberg Kravis Roberts & Co, funding it with a fully-underwritten GBP1.10 billion rights issue.
Avincis is owned by World Helicopters Sàrl, a portfolio company of investment funds affiliated with Investindustrial and Kohlberg Kravis Roberts & Co.
Under the terms of the deal, Babcock will assume Avincis's GBP705 million net debt. Babcock said it has entered into a GBP383 million multi-currency debt facility and a EUR620 million debt facility to enable it to refinance Avincis' debt after the acquisition is completed, if needed.
Shares under the 5 for 13 rights issue are priced at 790 pence, 42% discount to Wednesday's closing price. Babcock said the rights issue is expected to raise GBP1.06 billion net. Shares in Babcock were Thursday quoted at 1,306.00 pence, down 4.4%, having dropped to 1,291.00 pence at the open.
The deal is subject to shareholders' approval in April.
Babcock had said in November 2013 that the parties were in exclusive talks over Avincis deal.
Avincis operates in 8 countries, providing helicopters and fixed-wing aircraft for emergencies such as medical, search and rescue, fire-fighting and civil protection.
"The proposed acquisition of Avincis meets Babcock's strategic objectives as it brings into the Babcock Group a market-leading business, delivering mission critical services and complex engineering support to blue-chip customers in multiple geographies," Peter Rogers, chief executive, said in a statement.
"Avincis already has a strong growth platform and its combination with Babcock will generate even greater expansion opportunities and value creation for Babcock's shareholders," Rogers added.
By Samuel Agini; [email protected]; @samuelagini
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