9th Oct 2013 06:37
LONDON (Alliance News) - Keller Group Plc. (KLR.L), a ground engineering specialist, Wednesday said it has agreed to purchase the Geotechnical Division of the Johannesburg-listed civil engineering and construction company Esorfranki Limited for an initial consideration of 500 million rand or 31 million pounds. Esorfranki Geotechnical is the largest ground engineering business in South Africa, offering design and build services to the mining, civil engineering and construction industries. It has a strong track record of executing projects in other Sub-Saharan African countries.
In the year ended February 28, Esorfranki Geotechnical generated revenue of 788 million rand, of which 46% was earned outside South Africa. The firm posted an underlying operating profit of 53 million rand. At the end of the year, the value of the gross assets to be acquired was 630 million pounds and the business had net assets of 419 million rand.
The acquisition will accelerate Keller's entry into selected sub-Saharan construction markets, where significant growth is expected over the medium to long term due to 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 500 million rand, on a debt and cash free basis, along with a maximum deferred consideration of 150 million rand dependent on the achievement of certain level of profits over the three years after the acquisition. Completion of the deal is expected by the end of November.
Copyright RTT News/dpa-AFX
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