9th May 2006 08:23
Babcock International Group PLC09 May 2006 9 May 2006 BABCOCK INTERNATIONAL GROUP PLC ACQUIRES NUCLEAR AND AIRPORTS SERVICES OPERATOR ALSTEC GROUP LIMITED Continuing its successful strategy of acquiring and developing technicallysophisticated businesses in growing infrastructure and asset management markets,Babcock International Group PLC ("Babcock") today announces the acquisition on adebt free basis of Alstec Group Limited ("Alstec") for a net cash considerationof £44.9 million, funded from existing banking facilities. Alstec reported turnover of £82.6 million in the year ended 31 March 2006 andprofit before interest and tax was £3.7 million after charging £1 million inrespect of legacy claims not transferring to Babcock. The business has a totalorder book of in excess of £67 million and gross assets of £21.5 million. Therecent award of additional contracts in nuclear and an extension of operationsin the airports business together with a reduced level of ongoing costs offerexcellent prospects for growth in Alstec's profits in the current year. Alstec operates in three distinct support services markets that are veryfamiliar to Babcock; nuclear, airports and defence systems. Within each ofthese markets Alstec provides a range of services and engineered solutions forits customers' operationally complex and critical activities. Babcock provideshigh value, technically based services to large public sector and blue chipcustomers operating in complex environments. Alstec's operations are entirelyconsistent with this model. In nuclear, with turnover of £40 million in the year to 31 March 2006, Alstecprovides technical expertise associated with the reactor island at many UKnuclear power stations including nuclear fuel handling equipment, remoteinspection, instrumentation and safety systems. Alstec provides decommissioningand waste management services at the Atomic Weapons Establishment, Aldermastonand for the UKAEA and reactor outage support for British Energy with whichAlstec holds 'critical supplier' status. Alstec supplies design, installationand commissioning services for reactor protection systems to British Energy andBritish Nuclear Group and is also involved in a number of long-term alliancecontracts with other key suppliers to the nuclear industry. This business willprovide a natural extension to Babcock's existing nuclear clean up andfacilities management contracts at Rosyth and HM Naval Base, Clyde. Alstec's airports services business, with turnover of £34 million in the year to31 March 2006, provides operations and maintenance services for BAA PLC'sautomated baggage sortation system at Heathrow airport. The business alsooperates and maintains the inter-terminal transfer facilities between allterminals. Opportunities to expand the provision of these services at Heathrowinto the proposed central terminal area redevelopment and the new T5 facilitiestogether with the possibility of similar service provision at other airportsoffer excellent growth prospects. Alstec also operates a small defence business (turnover in the year to 31 March2006 of £9 million) for the design, supply, maintenance and upgrade of equipmentfor the Ministry of Defence and its equipment suppliers for submarines, surfaceships and aircraft. In particular it designs, supplies and maintains keyreactor components for the Vanguard and Astute class submarines and is thedesign authority for the hydroplane and rudder actuators for Astute. Alstec'sdefence business has also been selected as supplier and systems integrator forthe award winning weapons handling system for the future aircraft carriers andhas been working in partnership with Babcock at Rosyth on a number of otheraircraft carrier opportunities over the past twelve months. The combination of Alstec's skills and track record with those of Babcockcreates exciting new opportunities in two major growth markets: nucleardecommissioning and airport management as well as augmenting Babcock's existingstrong position in the maintenance of submarines, surface ships and on the newcarrier programme. Peter Rogers, Chief Executive of Babcock, commented: "Alstec is an excellent strategic fit with Babcock's existing support servicesactivities and brings to us an important set of new customers. We are now wellplaced to bid for a range of opportunities in the expanding market for nuclearutility support services and decommissioning. Alstec's position in the airportservices market is well established, and provides Babcock with a number ofadditional opportunities in a growing market. "Having recently secured some significant new contracts, Alstec offers excellentgrowth prospects and we expect the acquisition of the business to be earningsenhancing for Babcock in its first year of ownership."* Martin Melling, Alstec's Chairman and Chief Executive, commented: "We are delighted to be joining Babcock. Alstec has an exceptional pedigreedating back to its GEC heritage, and there are significant opportunities to growin each of our core markets. We believe that, with Babcock's resources,relationships and complementary skills, we are exceptionally well-placed to growour business, which will provide increasing opportunities for the Alstecworkforce." Enquiries: Babcock Group Tel: 020 7291 5000 Peter Rogers (Chief Executive) Bill Tame (Finance Director) Financial Dynamics Tel: 020 7269 7121 Andrew Lorenz / Susanne Walker Notes to editors: About Babcock International Group PLC Babcock International Group PLC is an asset management business. We managefixed infrastructure and mobile assets for a range of blue chip customers.Babcock integrates labour, technical capabilities, systems and supply chainpartners to meet the outsourcing needs of customers for 'mission-critical'capabilities. In the year to 31 March 2006 sales from continuing business were £837 million. The Group operates across five core business segments: Defence Services, supplying facilities management, equipment support andtraining services to the armed forces. Technical Services, providing engineering and logistical support to both thedefence and civil sectors in the UK. Engineering and Plant Services, supplying design, installation and maintenancesupport to the energy sector in Africa and the US. It also holds the Volvofranchise for construction equipment in Southern Africa. Rail, providing design, renewal and installation services for the UK railinfrastructure. Networks, supporting the design, maintenance and renewal of power transmissionand cellular telecommunications networks in the UK. Babcock's head office is in London and the Company's shares are quoted on theLondon Stock Exchange in the support services sector (EPIC:BAB). For furtherinformation, please visit Babcock's website at www.Babcock.co.uk. About Alstec Alstec Group is a support services business operating in three markets -nuclear, defence and airport services employing some 1200 direct UK staff.Alstec operates in demanding, complex environments: providing both equipment /systems design and support services through its three market orientated businessunits The nuclear business, headquartered at Whetstone, has staff located atmany civil nuclear facilities in the UK and at AWE Aldermaston. The defencebusiness is niche and principally involved in specialist naval activities. Theairport services business is centred on Heathrow and provides comprehensiveoperations and maintenance support for the baggage systems in the centralterminal area, much of which it has designed, supplied and installed in its roleas a systems integrator. For further information, please visit Alstec's websiteat www.alstec.com. * The statement that the acquisition will be earnings enhancing in its firstyear of ownership when compared to the earnings per share that Babcock wouldhave achieved without the acquisition, does not constitute a profit forecast andshould not be interpreted to mean that the earnings per share in the year to 31March 2007, or in any subsequent period, would necessarily match or be greaterthan those for the relevant preceding financial period. Dealing Disclosure Requirements Under the provisions of Rule 8.3 of the City Code on Takeovers and Mergers (the"Code"), if any person is, or becomes, "interested" (directly or indirectly) in1% or more of any class of "relevant securities" of VT Group plc or of BAESystems plc or of Babcock International Group PLC, all "dealings" in any"relevant securities" of that company (including by means of an option inrespect of, or a derivative referenced to, any such "relevant securities") mustbe publicly disclosed by no later than 3.30 pm (London time) on the Londonbusiness day following the date of the relevant transaction. This requirementwill continue until the date on which the offer becomes, or is declared,unconditional as to acceptances, lapses or is otherwise withdrawn or on whichthe "offer period" otherwise ends. If two or more persons act together pursuant to an agreement or understanding,whether formal or informal, to acquire an "interest" in "relevant securities" ofVT Group plc or of BAE Systems plc or of Babcock International Group PLC, theywill be deemed to be a single person for the purpose of Rule 8.3. Under the provisions of Rule 8.1 of the Code, all "dealings" in "relevantsecurities" of VT Group plc or of BAE Systems plc or of Babcock InternationalGroup PLC by VT Group plc or BAE Systems plc or Babcock International Group PLC,or by any of their respective "associates", must be disclosed by no later than12.00 noon (London time) on the London business day following the date of therelevant transaction. A disclosure table, giving details of the companies in whose "relevantsecurities" "dealings" should be disclosed, and the number of such securities inissue, can be found on the Takeover Panel's website atwww.thetakeoverpanel.org.uk. "Interests in securities" arise, in summary, when a person has long economicexposure, whether conditional or absolute, to changes in the price ofsecurities. In particular, a person will be treated as having an "interest" byvirtue of the ownership or control of securities, or by virtue of any option inrespect of, or derivative referenced to, securities. Terms in quotation marks are defined in the Code, which can also be found on thePanel's website. If you are in any doubt as to whether or not you are requiredto disclose a "dealing" under Rule 8, you should consult the Panel. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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