4th Jun 2007 07:02
AMEC PLC04 June 2007 AMEC plc - Disposal For immediate release, 4 June 2007 AMEC plc ("AMEC") Divestment of Property Developments and Building and Civil Engineering businesses • Morgan Sindall to acquire two of AMEC's four Built Environment businesses: Property Developments and Building and Civil Engineering • Morgan Sindall to pay a £55 million premium to aggregate net assets as at 30 April 2007, resulting in an expected total net cash consideration of approximately £26 million • Divestment delivered ahead of schedule and in line with AMEC's overall expectations • Divestment of AMEC's remaining Built Environment businesses in Building and Facilities Services and PPP progressing well AMEC Chief Executive, Samir Brikho, said: "This transaction is an excellent outcome for AMEC shareholders and an importantmilestone in delivering the strategy we presented in December 2006. MorganSindall not only provides a strategic fit for these businesses, but also a goodnew home, and strong prospects for their future. We wish them well. Once our divestment programme is complete we will then move ahead with ourstrategy to further build AMEC's position as the leading provider ofconsultancy, engineering and project management services to clients in energyand industrial process markets." A conference call for analysts and investors will be held today at 09.30amDelivery on strategy On 13 December 2006, AMEC announced its new vision, to be a leading supplier ofhigh value consultancy, engineering and project management services to definedmarket segments within the world's energy and industrial process industries. Consistent with this vision, AMEC initiated a process to divest itself of thefour non-core businesses that make up the Built Environment division, togetherwith various specialist businesses, as quickly as possible during 2007,consistent with optimising value. Today AMEC has delivered on a significant part of this strategy, announcing thedivestment of two of the four Built Environment businesses: the PropertyDevelopments business, AMEC Developments Ltd ("ADL"), and the Building and CivilEngineering business, Design and Project Services ("DPS"). This follows the successful divestment of four specialist businesses; AMEC SPIECapag, AMEC's interest in AMEC SPIE Rail Systems Ltd, Buchan Concrete Solutionsand AMEC Dynamic Structures, announced earlier this year. The divestment process for the remaining two Built Environment businesses,Building and Facilities Services and the PPP business, is progressing well. Aspreviously announced, first round bids have been received for each of thesebusinesses. The first round has been encouraging and the second stage of theprocess is now well advanced. Today's transaction has no affect on AMEC's provisions relating to a smallnumber of completed contracts, where disputes remain, that were provided for inthe group's 2006 financial statements. The transaction AMEC and Morgan Sindall plc ("Morgan Sindall") today announce that they haveagreed terms for the sale of ADL and DPS. Morgan Sindall will acquire the entire share capital of ADL, a PPP concession*and the assets and business of DPS, including all current and future contracts.As is normal in such transactions, AMEC will retain responsibility for long tailobligations on completed contracts. Aggregate capital employed for these entities as at 31 December 2006 was£(54) million. As at 30 April 2007 aggregate net liabilities, including net cashof about £8 million to be sold, are expected to be £29 million. The transactionrepresents a premium of £55 million to the aggregate net assets as at 30 April2007, resulting in a total net cash consideration which is expected to beapproximately £26 million. The transaction requires certain consents andwaivers, which if not forthcoming, may result in an adjustment to the totalconsideration. Proceeds from the transaction will be held on deposit. In view of the size of the transaction, it is conditional on the approval ofMorgan Sindall shareholders, which will be sought at an Extraordinary GeneralMeeting that is expected to take place in July. Completion is expected shortlythereafter. The Morgan Sindall board will unanimously recommend that its shareholders votein favour of the transaction. AMEC has received irrevocable intentions to votein favour of the transaction from the Morgan Sindall Directors and a formerDirector who together represent 18 per cent of Morgan Sindall's issued sharecapital. * The Inland Revenue Newcastle Estate PPP concession that is managed by ADL ADL This business offers services from land assembly, remediation and planningthrough to financing and project management, and has particular expertise inmixed-use urban regeneration projects. Property Developments participates in twoimportant strategic partnerships, with English Cities Fund, to regenerate innercity locations and ISIS Waterside Regeneration, to redevelop British Waterways'large portfolio of non-operational sites across the UK canal network. Thebusiness generates profit from the development and sale of property assets andis not a long-term investor in completed buildings. Joint Managing Directors ofthe business are Matt Crompton and Nigel Franklin and the Finance Director isDavid Hoyle. DPS This business offers integrated design, project management and constructionservices and is focused on key UK market sectors such as education, healthcare,defence, manufacturing and transport, which offer sound growth prospectstogether with the right balance of risk and reward. Managing Director of thebusiness is John Moss; Commercial Director, Martin Broome and the FinanceDirector is Warren Underwood. In the year ended 31 December 2006, these businesses had, in aggregate, over2,800 employees, and generated revenues of £758 million and losses of £14million before interest, tax and intangible amortisation but after exceptionalitems** of £15 million. Gross assets at 31 December 2006 were £233 million. ** excluding contracts retained by AMEC Enquiries to: AMEC plc + 44 (0)20 7634 0000 Analysts and investors:Samir Brikho, Chief ExecutiveStuart Siddall, Finance DirectorNeil Jamieson, Director of Investor Relations Media: Charles Reynolds, Head of Media Relations Notes to editors AMEC plc AMEC is an international project management and services company that designs,delivers and supports client assets for customers across the public and privatesectors. AMEC employs more than 20,000 people working from a network of officesthroughout the U.K., U.S. and Canada, as well as regional offices and projectsworldwide. AMEC shares are traded on the London Stock Exchange where the companyis listed in the Support Services Sector (LSE: AMEC:L). Internet users will be able to view this announcement, together with otherinformation about AMEC plc, at the company's web site www.amec.com N M Rothschild & Sons Limited ("Rothschild") and UBS Limited ("UBS") are actingas financial advisers to AMEC in relation to the transaction. Rothschild and UBS are acting exclusively for AMEC and are not acting for anyother person in relation to the transaction and will not be responsible to anyperson other than AMEC for providing the protections afforded to clients ofRothschild and UBS Limited or for providing advice in relation to the contentsof this announcement or the transaction. Morgan Sindall plc Morgan Sindall is a top ten United Kingdom construction group employing over5,000 people. Leading businesses operate within four specialist divisions ofaffordable housing, fit out, construction and infrastructure services. MorganSindall shares are traded on the London Stock Exchange where the company islisted in the Construction Sector (LSE: MGNS:L). For further information on Morgan Sindall visit: www.morgansindall.co.uk Further enquiries to: Morgan Sindall plc +44 (0)20 7307 9200John Morgan, Executive ChairmanPaul Smith, Chief ExecutiveDavid Mulligan, Finance Director College Hill +44 (0)20 7457 2020Matthew Smallwood/Kate Pope ENDS This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
AMFW.LMorgan Sindall Group