26th Jun 2008 11:14
Fenner PLC ("Fenner")
Fenner Announces Its Intention to Acquire the Assets of the Conveyor Services Corporation Group of Companies
Fenner is pleased to announce that it has exchanged contracts to acquire substantially all of the assets and businesses of the Conveyor Services Corporation group of companies ("CSC") including its sister companies Classic Conveyor Components Corporation ("Classic") and Loadout Services Inc ("Loadout"), and a majority interest in Conveyor Services, SA, a Chilean registered company ("CS Chile"); together the "CSC Group". The CSC Group is wholly owned by Troy, Joy, Patrick and Keith Dolan and is based predominantly in North America. Completion is expected to take place once all regulatory filings, consents and assignments have been effected but in any event will not be before 15th July 2008 or later than 2nd September 2008.
With eight strategically located branches and over 375 skilled employees CSC, Classic and CS Chile design, install and maintain conveyor systems for the material handling industries in the Americas. They provide a full service offering which aims to improve and prolong conveyor performance. Services include conveyor belt splicing, pulley lagging and the service and provision of conveyor idlers and conveyor structures.
Loadout is complementary to CSC, Classic and CS Chile offering expertise and management in material handling to the coal industry in the Americas by using the latest technologies and improving efficiencies thereby reducing transportation costs.
Combined gross assets valued at US$26 million on 31st December 2007 (after adjustment for assets excluded from the sale) will be acquired for an initial cash consideration of US$46 million with a further US$20 million being paid on the first anniversary of the Closing Date. Additional cash consideration in the form of commission will be paid conditionally based upon revenue and profitability achieved by CSC Group over a maximum of seven years. The conditional consideration, including potential working capital adjustments, is capped at US$28 million. The CSC Group earned pro-forma profits before tax of US$8 million in 2007 which excludes US$1 million of start up costs for CS Chile.
The CSC Group will be integrated into the newly formed Fenner Dunlop Conveyor Systems & Services, Inc. ("Fenner Dunlop CSS") which also includes the recently acquired King Energy Services business. The combined services businesses will be run separately to the Fenner Dunlop Conveyor Belting businesses in North America. Troy Dolan will work with Fenner Dunlop CSS to ensure that there is a smooth transition of the CSC Group into Fenner and he will be entering into a consultancy agreement as well as a Sales Representative Agreement setting out the scope of his duties and involvement post completion.
Mark Abrahams, CEO of Fenner PLC said, "The strategic acquisition of the CSC Group extends the range and scope of services offered to our customers and represents an important further step towards our goal of building a world class mining service operation which makes Fenner Dunlop CSS the leader in its field in the Americas."
Fenner is a world leader in the field of reinforced polymer engineering. Its products include lightweight and heavyweight conveyor belting for the mining and power generation markets; precision motion control products for the office automation and mechanical equipment markets; sealing products for the mining, hydraulics and energy industries; and technical textile structures for medical and industrial applications.
For further information please contact:
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Fenner PLC |
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Mark Abrahams, Chief Executive |
01482 626501 |
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Richard Perry, Finance Director |
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Weber Shandwick Financial |
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Nick Oborne/ Stephanie Badjonat |
020 7067 0700 |
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