1st Dec 2006 07:01
Hampson Industries PLC01 December 2006 1 December 2006 NOT FOR RELEASE OR DISTRIBUTION IN OR INTO THE USA, CANADA, THE REPUBLIC OFIRELAND, AUSTRALIA OR JAPAN Hampson Industries PLC Proposed Acquisition of Composite Horizons, Inc. Proposed Vendor Placing of 7,745,098 new ordinary shares at 153 pence per share Hampson Industries PLC ("Hampson" or the "Company"), the international aerospaceand precision engineering group, today announces the proposed acquisition ofComposite Horizons, Inc ("CHI") (the "Acquisition") for a total initialconsideration of USD22.8 million (GBP12.0 million). Hampson also announces anunderwritten vendor placing of 7,745,098 new Ordinary Shares at a price of 153pence per share (the "Vendor Placing") to raise approximately GBP11.8 millionbefore expenses. The proceeds of the Vendor Placing will be applied to fund, inpart, the consideration payable on completion of the Acquisition. The balance ofthe consideration will be settled from an extension of the Company's existingdebt facilities which will also provide the Company with additional capital forinvestment in its automotive turbocharger business. The Vendor Placing has beenfully underwritten by Investec Bank (UK) Limited ("Investec") and ArbuthnotSecurities Limited ("Arbuthnot"). A further variable element of consideration may be payable or repayable toHampson based on CHI's financial performance over the two year period ending 31December 2008. The maximum total consideration payable cannot exceed USD32million (GBP16.8 million). The initial consideration is subject to adjustmentdepending on the working capital of CHI at completion. The sale and purchaseagreement (the "Acquisition Agreement") is conditional, upon, inter alia, theexpiry of the thirty day waiting period imposed by the Exon-Florio provision.The Exon-Florio provision is administered by the Committee on ForeignInvestments in the United States. The Company will update shareholders in duecourse in relation to this approval. CHI is a privately owned business based in Covina, California, with over 30years of experience in the engineering, development and manufacture of complexgeometry, advanced composite components. CHI specialises in high temperaturepolymer composites, a niche technology primarily for high performance gasturbine engine applications and structural airframe components where greaterstrength and temperature resistance properties are required. Around this core competency CHI manufactures components and assemblies for adiverse range of aerospace applications for both military and commercialaircraft, launch vehicle and satellite structures as well as gas turbineengines. CHI also produces light-weight composite components for the medicalindustry, including components for digital radiography, CT, PET and radiationtherapy. The acquisition of CHI is consistent with Hampson's strategic push into highermargin, higher growth composite materials, which are increasingly replacingmetals in aerospace manufacturing. CHI's capabilities are highly complementary to those of Hampson's existingbusinesses, particularly its US subsidiaries, Texstars Inc. and Coast CompositesInc., which were acquired in the last two years. They include very hightemperature autoclave moulding, compression moulding, resin transfer ("RTM") andvacuum assist resin transfer moulding ("VARTM"), as well as hand lay-up andassembly and 5-axis machining and finishing. In addition, the Acquisition brings access to a number of important aerospaceprogrammes such as the F-35 (Joint Strike Fighter), F/A-22 (Raptor) and Boeing777 on which Hampson was previously not well represented. It also brings accessto a number of unmanned, satellite and space programmes that provide a furthersource of growth. CHI's unadjusted audited accounts for the year ended 31 December 2005 reportedtotal revenue of USD14 million (GPB7.4 million), profit before tax (after vendorremuneration) of USD1.0 million (GBP0.5 million) and gross assets of USD5.2million (GBP2.8 million). The Acquisition is expected to be earnings enhancing in the first twelve monthsof ownership. Kim Ward, Chief Executive of Hampson Industries PLC, commented: "We welcome CHI to the Hampson Group as we continue to execute ourclearly-focussed growth strategy and develop our portfolio of defensible, nichebusinesses offering state-of-the-art manufacturing technologies and world-classinnovation. "CHI brings cutting-edge, high temperature composite technologies and gives us abroader, deeper portfolio of products and customer programmes in our coreaerospace market. We are also very excited by the further potential forcross-selling brought by CHI, as each acquisition we make offers additional,complementary customers and products." The Vendor Placing has been fully underwritten by Investec and Arbuthnotpursuant to the terms of an agreement entered into by the Company, Investec andArbuthnot (the "Placing Agreement"). The Vendor Placing is conditional, interalia, on the admission of the new Ordinary Shares to the Official List of the UKListing Authority and to trading on the London Stock Exchange's Main Market("Admission"), and the Acquisition Agreement being completed in all respects(save for any condition relating to the Placing Agreement being unconditionaland payment of the consideration). On Admission, the new Ordinary Shares willrank pari passu in all respects with the existing ordinary shares in Hampson. Investment in Automotive The Company intends to use £3.0 million of its enlarged debt facilities to fundprogressive investment in the expansion of capacity in its Precision Automotivedivision, a global leader in the manufacture of small, critical-tolerancecomponents for automotive turbochargers. Demand for turbochargers has grown rapidly in recent years as a result ofprogressively tightening vehicle emission restrictions and the rapid penetrationof more fuel-efficient, diesel-engined vehicles. Future demand is expected tocontinue to rise as a result, inter-alia, of increasing sales of diesel-enginedpassenger cars and light trucks in the North American market. Admission, Settlement and Dealings Application has been made to the UK Listing Authority for the new OrdinaryShares to be admitted to the Official List and to the London Stock Exchange forthe new Ordinary Shares to be admitted to trading on its Main Market. It isexpected that Admission will become effective and that dealings will commence at8.00am on the third business day following the receipt of the Exon-Florioregulatory clearance and that CREST accounts will be credited on that date. Afurther announcement will be made in due course. Further Information For further information please contact: Hampson Industries PLC 01384 472 941Kim Ward, Chief Executive 01384 472 946Howard Kimberley, Finance Directorwww.hampsongroup.comInvestec 020 7597 5970Keith AndersonAndrew CraigArbuthnot 020 7012 2000Richard DunnGraham SwindellsM: Delta 020 7153 1268Jonathan GollinsMarylene Guernier Investec, which is authorised and regulated in the United Kingdom by theFinancial Services Authority, is acting exclusively for Hampson Industries PLCand no one else in connection with the Placing. Investec will not be responsibleto persons other than Hampson Industries PLC for providing the protectionsafforded to their customers or for providing advice in connection with theVendor Placing or any other matters referred to in this announcement. Arbuthnot, which is authorised and regulated in the United Kingdom by theFinancial Services Authority, is acting exclusively for Hampson Industries PLCand no one else in connection with the Placing. Arbuthnot will not beresponsible to persons other than Hampson Industries PLC for providing theprotections afforded to their customers or for providing advice in connectionwith the Vendor Placing or any other matters referred to in this announcement. Nothing in this announcement should be construed as a profit forecast or beinterpreted to mean that the future earnings per share or profits of Hampsonwill necessarily be greater than the historic published earnings per share. This announcement does not constitute or form part of an offer or a solicitationof an offer to purchase or subscribe for, underwrite or otherwise acquire anyrights, shares or other securities. The new Ordinary Shares have not been norwill they be registered under the United States Securities Act of 1933, asamended, or under the applicable securities laws of any state, province,district, territory or other jurisdiction of the United States, Canada,Australia, Japan or the Republic of Ireland and no regulatory clearances inrespect of the New Ordinary Shares have been or will be applied for in any suchjurisdiction. The new Ordinary Shares are not being, and may not be, offered,sold, taken up, renounced or delivered, directly or indirectly within or intothe United States, Canada, Australia, Japan or the Republic of Ireland or theirrespective territories or possessions. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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