15th Aug 2005 08:02
Weir Group PLC15 August 2005 15 August 2005 THE WEIR GROUP PLC AGREES TO ACQUIRE POMPE GABBIONETA SpA The Weir Group PLC ("Weir") is pleased to announce the signing of an agreementto purchase 100% of the issued share capital of Pompe Gabbioneta SpA("Gabbioneta"), a specialist petrochemical pump business located in Milan,Italy. The consideration for the purchase will be €100m (£69.0m*) payable incash on completion. The transaction is expected to complete on or before 30September 2005. The acquisition is expected to be immediately earnings enhancingfollowing completion. Gabbioneta manufactures speciality pumps primarily for thedownstream end of the oil and gas market. The company has a wide range ofcustomers including oil majors and leading engineering contractors and is rankednumber three in the European, Middle East and African petrochemical pump marketwhere it has a significant installed base. For the year to 31 December 2004, Gabbioneta reported sales of €44.8m (£30.9m*); earnings before interest, tax and amortisation (EBITA) of €6.7m (£4.6m*) and profit before tax (PBT) of €3.1m under Italian GAAP. Under IFRS rulesamortisation of €2.5m will not be charged going forward. As at 31 December 2004gross assets were €48.9m (£33.7m*). Unaudited management accounts for the firstsix months of 2005 indicate that both revenues and operating profits are aheadof the prior year. Gabbioneta, which operates from two facilities in Milan, employs 240 people. Thebusiness was established in 1897 and was most recently owned by private equityfunds led by Aksia Group. The acquisition is in line with Weir's strategic objective to grow our ClearLiquid business in higher margin, high growth specialist markets. The Board of Weir believes that the acquisition of Gabbioneta offers manybenefits and opportunities which include: • The acquisition of a well established business with a considerableinstalled base enjoying a high level of customer loyalty and complementarygeographic footprint. • The opportunity to create a global centre of excellence in oil processpumps. • A strengthening of Weir's relationship with many of the world's majoroil producers through increased sales volumes and broader product offerings. • The opportunity to extend Gabbioneta's markets in the USA and Asia,using the Weir name and geographic footprint, and Gabbioneta's existinginstalled base. • The opportunity to obtain further benefits from Weir's recentinvestments in purchasing and manufacturing technologies and systems. Commenting on the acquisition, Mark Selway, Chief Executive said, "This is asignificant development for the Weir Group. Our strategy is focused onconsolidating our position in the specialist pump market and building aportfolio of high quality high margin businesses. The acquisition of Gabbionetaachieves both. "By integrating Gabbioneta into our Clear Liquid Division we will enhance ourportfolio of oil processing products. Furthermore, the creation of an enlargedclient base will provide opportunities to expand our product offering andservices into the oil and gas industry. "We very much look forward to working with the existing Gabbioneta managementand staff, including chief executive Roberto Zecchi, to grow and develop thebusiness into a leading global player in the petrochemical pump market." Further information on the consideration 1. The Weir Group PLC will complete the acquisition pursuant to agreementsentered into with its shareholders with completion dates on or before 30September 2005. Contact details: The Weir Group PLC Available through UBSMark Selway, Chief Executive Tel. 0141 637 7111Helen Walker, Public Relations Manager (Mobile: 07789 032296)The Maitland Consultancy Tel. 020 7379 5151Suzanne Bartch (Mobile: 07769 710 335)Peter Ogden (Mobile: 07811 124 197) --------------------------* The exchange rates used for the above £ sterling equivalents are • 1.45 = £1being the rates prevailing at the close of business on 12 August 2005. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Weir Group