15th Sep 2005 07:04
RPS Group PLC15 September 2005 RPS GROUP PLC("RPS" or "the Group") Acquisition of ECL Group Ltd ("ECL") RPS announces the acquisition of ECL a leading provider of services to theexploration and production phase of the oil and gas sector, for a maximumconsideration of approximately £27 million. Introduction RPS's strategy is to enhance its market position by developing its range ofservices, employing highly skilled staff and making acquisitions of qualitybusinesses in order to extend its expertise and geographical presence. ECL (www.ecqc.com) ECL has been providing consultancy services to the international oil and gasindustry since 1969 working in most countries where exploration and productionhas taken place. The business has operating offices in the UK(Henley-on-Thames, London, Aberdeen and Winfrith), USA (Houston), Canada(Calgary) and Australia (Perth), supported by a global network of agents andrepresentatives. The business is organised into two operating divisions: consultancy services andoperations, the latter comprising seismic and well site geological services.Consultancy services involve, for example, prospect identification, blockselection and licence application, reserves quantification and projecteconomics. The range of services ECL offers enables it to assist clients at allstages of the exploration and production cycle. ECL employs 125 full time staff, many of whom are shareholders. In addition, asis common in this sector, the business utilises a number of specialistconsultants, the majority of whom have long term relationships with the company.The four Directors of ECL will be remaining with RPS following completion andwill have important roles in the enlarged RPS energy division. Financials In the year ended January 2005 ECL had revenues of £23.5 million, profit beforetax of £3.3 million and profit after tax of £2.3 million. Net assets at 31January 2005 were £6.9 million including net cash of £1.1 million. Consideration Consideration paid at completion was £13,047,450 in cash and 2.83 million newRPS shares valued at £5,018,250. On the first anniversary of the transaction,assuming certain operational conditions are met, a further £3,264,600 will bepaid in cash and 0.99 million shares, currently valued at £1,753,650, issued tothe vendors. On the second anniversary a further £2,460,950 will be paid incash and 0.87 million shares, currently valued at £1,553,650, issued to vendors.Total consideration, assuming no share price movement, is £27,098,550. Thenumber of shares to be issued has been calculated by reference to the RPS shareprice when the terms of the transaction were agreed in July 2005, indexedagainst the performance of the FTSE Support Service Index until the end oftrading on 8 September, giving rise to an issue price of 177.6 pence. RPS Energy In September 2003 RPS made a significant move into the energy sector with theacquisition of Hydrosearch Associates Ltd ("HAL") which had, as its corebusiness, the provision of geological advice to the oil and gas sector but whichhad added environmental advice to its range of services for that sector and hadbegun to pioneer work in the offshore wind energy market. RPS developed its energy business around HAL during 2004 by making 3 furtheracquisitions: Troy-Ikoda Ltd (March); Bowman Bishaw Gorham Pty Ltd (April) andCambrian Consultants Ltd (July). In addition the onshore wind energy business,already developing in RPS, has been moved into RPS Energy, along with ournuclear safety activities. This rapid progress positions RPS as a leading participant in the global energyconsultancy sector. This has occurred at a time when market circumstances inthis sector have become significantly more favourable as a result of the risingoil price and the continuing debate about global warming, both of which havebrought back onto the political agenda the possibility of constructing newnuclear power stations in the UK. This strengthened position of our energy business has created otheropportunities. The acquisition of ECL is another strategic step in thedevelopment of this business. Brook Land, RPS Chairman, said: "Our strategic move into the energy sector has proved to be timely andsuccessful. That success has, in significant part, been due to the quality ofthe Hydrosearch business, its management and skilled staff. The acquisitions ofTroy Ikoda, BBG and Cambrian during 2004 brought into RPS additional teams ofhighly skilled and motivated people. With these skills and against a backgroundof a rapidly increasing oil price RPS Energy has been able to developencouragingly. The acquisition now of ECL provides not only a major increase inour size and product range, but also positions us as a clear market leader inthis global industry. We anticipate this business will be a significant enginefor growth in the coming years." 15 September 2005 RPS is an international consultancy providing advice upon the development ofnatural resources, land and property, the management of the environment and thehealth and safety of people. We trade in the UK, Ireland, the Netherlands, USAand Australia and undertake projects in many other parts of the world. ENQUIRIESRPS Group plc Today: 020 7457 2020Dr Alan Hearne, Chief Executive Thereafter: 01235 863206Gary Young, Finance Director College HillJustine Warren Tel: 020 7457 2020Matthew Smallwood This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
RPS.L