23rd Aug 2007 07:00
Cape PLC23 August 2007 Cape PLC ("Cape" or the "Company") Acquisition of Total Corrosion Control Group Pty Ltd Cape PLC (AIM:CIU), the international provider of essential support services tothe energy sector, announces that it has agreed to acquire the Australian basedTotal Corrosion Control group of companies ("TCC Group"). These arrangements, which are due to complete on 31 August 2007, are betweenCape Australia Investments Pty Limited ("Cape Australia"), a wholly-ownedsubsidiary of Cape PLC and the shareholders of TCC Holdings (2005) Pty Ltd ("TCCHoldings"), the ultimate holding company of the TCC Group. Cape Australia has agreed to acquire all of the issued share capital of TCCHoldings for a consideration that reflects an enterprise value for the TCC Groupof A$85.0 million (£34.3 million)1.. Subject to the TCC Group achieving itsearnings target for the year ending 30 June 2008, up to a further A$12.5 million(£5.1 million) will be payable. The initial consideration payable at completion will comprise A$65.0 million(£26.3 million) in cash and A$20.0 million (£8.1 million) in Cape new ordinaryshares ("Initial Consideration Shares") (at an issue price per share calculatedby reference to the volume weighted average price of Cape's ordinary shares overthe five business days immediately preceding 31 August 2007) which will besubject to orderly market provisions concerning their disposal over the twoyears following completion. The additional consideration will be payable incash. At completion, application will be made for the Initial Consideration Shares tobe admitted to trading on AIM. The TCC Group, which operates mainly in Western Australia, offers a wide rangeof industrial services to blue chip clients in the mining, oil, gas andconstruction industries. The TCC Group specializes in the provision of blasting,industrial painting, protective coatings, thermal and acoustic insulation, sheetmetal fabrication, rubber lining and access scaffolding. The TCC Group isheadquartered in Kwinana where it operates one of the largest blasting andpainting workshops in the world. It also has regional offices at Karratha andPort Hedland. Its principal customers are BHP Billiton, Alcoa, Rio Tinto, BPRefineries, the Murrin Murrin Nickel Mine and Woodside. In the year to 30 June 2007, the TCC Group's turnover was A$113.6 million (£45.9million), its earnings before interest, depreciation, tax and amortization wereA$14.9 million (£6.0 million) and it generated earnings before interest and taxof A$14.0 million (£5.6 million). The approximate value of the net assets beingacquired at completion is A$ 18.2 million (£7.4 million). Cape's Directors areof the opinion that the acquisition will be earnings enhancing in the firstyear. 2. PricewaterhouseCoopers Corporate Finance and DLA Phillips Fox acted for Cape onthis transaction. Middletons acted for the TCC Group's current shareholders. 1. For the purposes of this announcement a conversion rate of A$1: £0.404 has been used. 2. This statement should not be interpreted as a profit forecast and does not necessarily mean that Cape's future earnings per share will match or exceed Cape's reported historical earnings. Cape's Chief Executive, Martin May, said: "Cape's agreement to acquire the TCC Group is a major milestone in theachievement of Cape's international strategic plan. I am pleased to say that ourdealings with the TCC Group, from initial discussions through exclusivity anddue diligence to completion, have been conducted in a timely and professionalmanner which is much to the credit of the TCC Group's vendors, advisers andsenior management. Cape's Directors believe that following completion of the acquisitionagreements, the TCC Group will bring immediate benefits to both businesses. TheTCC Group will provide a stable platform from which to develop Cape's existingFar East/ Pacific Rim businesses while significantly extending Cape's footprintin the region. The TCC Group's blasting, painting, insulation and accessservices are all key components of Cape's core disciplines. The TCC Group'sestablished presence in Australia's booming resources sector offers Cape anopening into a huge new market. With this platform in place, Cape will notsolely be reliant on making acquisitions in Australia but will also be able toachieve organic growth by competing on both price and quality of service. We are also delighted to have secured the continuing involvement of the TCCGroup's highly experienced senior management team and its skilled blue-collarworkforce. Moreover, as part of its commitment to the region, Cape plans overthe coming months to relocate its regional head office from Singapore to Perth,Western Australia. In the meantime, Cape will shortly complete on a lease ofpremises in the Darwin area from which to support offshore works on the NorthWest Shelf and will continue to pursue other complementary acquisitionopportunities and targets in Australia." Terry Iannello, the TCC Group's Managing Director, said: "The TCC Group is excited by the new phase of growth offered by our inclusion inthe Cape group of companies. Cape's international strengths, coupled with theTCC Group's long expertise in the Australian market, will provide manyadditional benefits and services to our clients, as well as additionalopportunities for our staff and management. We look forward to working togetherto provide even more high quality services to the energy, mining, oil and gasindustries in Australia. We have also been impressed with the ease of theprocess and the negotiations with Cape and look forward to working together asCape TCC." ENDS For further information, please contact: Cape PLCMartin May, Chief Executive +44 (0)1924 876 276 Bell Pottinger Corporate & FinancialNick Lambert / Victoria Geoghegan +44 (0)20 7861 3232 / +44 (0)7811 358 764 Adrian Bradley +61 (0) 2 8298 6100Third Person +61 (0) 400 499 782 Collins Stewart Europe Limited Chris Wells/ Mark Connelly +44 (0)20 7523 8350 Notes to editors Cape PLC is the parent company of a number of service providing organizationsoperating primarily in the oil and gas, petrochemical and power generationindustries. In the year to 31 December 2006, Cape reported turnover of £295.5 million. Cape currently employs c. 8,200 people in 23 countries worldwide. Cape specialises in the provision of scaffolding, insulation, fire protection,specialist cleaning and other essential services to major industrial clients inthe energy sector. Cape's ability to provide specialist cleaning services was enhanced by theacquisition of DBI Group Limited in October 2006. On 23 April 2007, Cape's shareholders approved the placing of 26,923,077ordinary shares at £2.60 per share to raise £70 million (before expenses). On 6 June 2007, Cape acquired Total Rope Access International Limited. On 22 June 2007, Cape acquired Endecon Limited. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
CIU.L