Proposed Acquisition of North American Piling

RNS Number : 7422G

Keller Group PLC

11 June 2013

 



THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED IN IT IS NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, NEW ZEALAND, THE REPUBLIC OF IRELAND, THE REPUBLIC OF SOUTH AFRICA OR ANY JURISDICTION IN WHICH THE SAME WOULD BE UNLAWFUL.

For immediate release                                                                                                                            11 June 2013

Keller Group plc ("Keller" or "the Group")

Proposed Acquisition of North American Piling

Keller (LSE: KLR), the international ground engineering specialist, today announces the proposed acquisition of North American Piling from North American Energy Partners Inc. ("North American Energy Partners"), subject to shareholder approval.

Key Highlights

·     North American Piling is a substantial Canadian foundations business, headquartered in Edmonton, Alberta, and has over 25 years' experience providing piling services, with a focus on piling in construction markets across Canada, including the Alberta oil sands region.

·     North American Piling employs approximately 400 staff and, in the year ended 31 March 2013, the business reported revenue of CDN $236.5 million (£149.7 million) and operating profit of CDN $38.5 million (£24.4 million).

·    The Acquisition is consistent with Keller's stated strategy and the Directors believe it will enhance the Group's offering by:

-    bringing into the Group a market-leading business, positioned in growth markets offering attractive margins;

-    increasing its exposure to the North American energy and resources sector;

-    providing the opportunity to develop broader customer relationships and secure new customers;

-    expanding its presence in the relatively under-developed Canadian geotechnical segment; and

-    delivering attractive financial metrics, including an immediate and significant enhancement in earnings per share.

·    The consideration will comprise an initial CDN$227.5 million (£144.0 million) on a cash and debt free basis, payable in cash on Completion and up to a further CDN$92.5 million (£58.5 million) of deferred contingent consideration payable in cash depending upon North American Piling's financial performance in the three years following Completion, giving a maximum aggregate consideration of CDN$320 million (£202.5 million).

·    Keller is proposing to finance the Acquisition through the net proceeds of the Placing announced today, together with the drawdown of some of the available funds under the New Bank Facility and existing bank facilities.

Commenting on the Acquisition, Justin Atkinson, Chief Executive of Keller, said:

"The Board has identified Canada as a key target market and this acquisition of a complementary piling business represents an excellent opportunity to build substantially on Keller's existing presence in that market.  North American Piling is a market-leading business with attractive margins positioned in growth markets, including the resource-rich regions of Western Canada.  The business has a strong record of growth delivered by an experienced management team who are transferring to Keller.  Importantly, the acquisition will be significantly earnings enhancing*." 

*   This should not be construed as a profit forecast. In particular, it should not be taken to mean that the earnings per share of Keller for the year ending 31 December 2013 will necessarily be higher than for the year ended 31 December 2012.

Analyst conference call

A conference call for analysts and investors will be held this morning at 9:00am with a replay facility made available later today. For details please contact RLM Finsbury on 020 7251 3801.

The Circular, containing details of the Acquisition and the notice of the Keller General Meeting at which a resolution will be proposed for the approval of the Acquisition by Keller Shareholders, will be published and posted to Keller Shareholders as soon as possible. The Circular will be made available by Keller on its website at www.keller.co.uk/investor/aspx.

This summary should be read in conjunction with the full text of this announcement

Jefferies International Limited ("Jefferies") is acting as exclusive financial advisor and joint sponsor to Keller on the acquisition and joint bookrunner and underwriter on the equity placing. Investec Bank plc ("Investec") is acting as joint sponsor to Keller on the acquisition and joint bookrunner and underwriter on the equity placing.

For further information, please contact:

Enquiries:

Keller                                                                                                                      [phone]

Justin Atkinson, Chief Executive

James Hind, Finance Director

Jefferies (Financial advisor, Joint Sponsor and Joint Bookrunner)                     [phone]

Simon Hardy

Andrew Bell

Harry Nicholas

Investec (Joint Sponsor and Joint Bookrunner)                                                    [phone]

Keith Anderson

James Rudd

Cara Griffiths

RLM Finsbury                                                                                                         [phone]

Gordon Simpson

Rowley Hudson

This announcement is not an offer to sell, or a solicitation of an offer to buy (in either case in the United States) any ordinary shares to be issued pursuant to the equity placing announced by Keller today in connection with the Acquisition. The shares have not been and will not be registered under the US Securities Act of 1933, as amended (the "Securities Act"), and may not be offered or sold, directly or indirectly, in the United States absent registration or an exemption from registration. There will be no public offering of securities in the United States. The shares have not been and will not be registered with any regulatory authority of any state within the United States.

Forward looking statements

Certain statements made in this document constitute forward looking statements. Forward looking statements can be identified by the use of words such as "may", "will", "should", "predict", "assurance", "aim", "hope", "risk", "expect", "intend", "estimate", "anticipate", "believe", "plan", "seek", "continue" or other similar expressions that are predictive or indicative of future events. All statements other than statements of historical facts included in this document, including, without limitation, those regarding the Group's expectations, intentions and beliefs concerning, amongst other things, the Group's results of operations, financial position, growth strategy, prospects, dividend policy and the industries in which the Group and, following Completion, the Enlarged Group operates, are forward looking statements. By their nature, such forward looking statements involve known and unknown risks, uncertainties and other factors, many of which are outside the control of the Group and its Directors, which may cause the actual results, performance, achievements, dividends of the Group and, following Completion, the Enlarged Group or industry results to be materially different from any future results, performance or achievements expressed or implied by such forward looking statements. As such, forward looking statements are no guarantee of future performance.

Such forward looking statements are based on numerous assumptions regarding the Group's present and future business strategies and the environment in which the Group will operate in the future. Among the important factors that could cause the Group's actual results, performance or achievements to differ materially from those in the forward looking statements include, among others, economic conditions in the relevant markets of the world, market position of Keller or its subsidiaries, earnings, financial position, return on capital and operating margins, political uncertainty, the actions of competitors, activities by governmental authorities such as changes in taxation or regulation, changing business or other market conditions and general economic conditions and such other risk factors identified in the "Risk Factors" section of the Circular. Forward looking statements should, therefore, be construed in light of such risk factors and undue reliance should not be placed on forward looking statements. These forward looking statements speak only as of the date of this document and are not intended to give assurance as to future results. The Group will update this document as required by applicable law, including the City Code on Takeovers and Mergers, Listing Rules, Prospectus Rules and/or the Disclosure and Transparency Rules of the Financial Conduct Authority, but otherwise expressly disclaims any such obligation or undertaking to release publicly any updates or revisions to any forward looking statement contained herein to reflect any change in Keller's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

Investec, which is authorised in the UK by the PRA and regulated in the UK by the PRA and the FCA, is acting exclusively for Keller in connection with the Acquisition and not for any other person and will not be responsible to any person other than Keller for providing the protections afforded to its clients, or for providing advice in relation to the Acquisition, the contents of this document and the accompanying documents or any arrangements referred to therein.

Jefferies, which is authorised and regulated in the UK by the FCA, is acting exclusively for Keller in connection with the Acquisition and not for any other person and will not be responsible to any person other than Keller for providing the protections afforded to its clients, or for providing advice in relation to the Acquisition, the contents of this document and the accompanying documents or any arrangements referred to therein.

Keller publishes its financial statements in pounds Sterling ("£" or "Sterling"). The abbreviation "£m" represents millions of pounds Sterling, and references to "pence" and "p" represent pence. References to "US dollars", "USD" or "US$" are to the lawful currency of the United States of America and references to "CDN$" or "Canadian dollars" are to the lawful currency of Canada. Unless otherwise stated, exchange rates of £ to CDN$: 1:1.58 and £ to US$: 1:1.55 have been used in this document.

Keller Group plc

Proposed Acquisition of North American Piling

Introduction

The Board has today announced the proposed acquisition of North American Piling from North American Energy Partners. The consideration will comprise an initial CDN$227.5 million (£144.0 million), on a cash and debt free basis, payable in cash on Completion and up to a further CDN$92.5 million (£58.5 million) of deferred contingent consideration payable in cash depending upon financial performance in the three years following Completion, giving a maximum aggregate consideration of CDN$320 million (£202.5 million).

The Acquisition is of sufficient size relative to that of the Group to constitute a Class 1 transaction for Keller under the Listing Rules and is therefore conditional, inter alia, upon the approval of Shareholders. A general meeting has been convened for the purpose of seeking such approval. The General Meeting will be held at the offices of Investec Bank plc, 2 Gresham Street, London EC2V 7QP at 10.00 a.m. on 28 June 2013. The Notice of the General Meeting will be set out at the end of the Circular.

Keller is proposing to finance the Acquisition through the net proceeds of the issue of 6,600,000 Placing Shares by way of the Placing announced today, together with the drawdown of some of the available funds under the New Bank Facility and existing bank facilities.

Summary information on North American Piling

North American Piling is being acquired from North American Energy Partners, a provider of mining, heavy construction, industrial and piling services in Canada whose shares are publicly traded on both the Toronto Stock Exchange and the New York Stock Exchange under the ticker symbol NOA.

North American Piling is headquartered in Edmonton, Alberta, Canada and has over 25 years' experience providing piling services, with a focus on piling in construction markets across Canada, including the Alberta oil sands region. The services offered by North American Piling comprise a broad range of piling-related solutions, including drilled piles, driven piles, helical piles and earth retention systems, as well as pipeline anchor systems and tank services.

The Directors believe the key strengths of North American Piling are as follows:

·    a market-leading foundations business in Canada positioned in growth markets offering attractive margins;

·    well-diversified revenue streams across regions, end markets and customers;

·    the business offers a broad range of piling-related solutions and resources, enabling North American Piling to deliver larger and more demanding piling projects; and

·    an experienced management team, with a strong track record of growing North American Piling.

North American Piling currently employs approximately 400 staff and had revenue of CDN$236.5 million in the year ended 31 March 2013. It is one of the largest foundation businesses in Canada. North American Piling's revenue by end markets in the three years ended 31 March 2013 was split between around 50 per cent. from commercial and public sector work, 25 per cent. from industrial work and 25 per cent. directly from oil sands work. Approximately 50 per cent. of North American Piling's total revenue was derived from work performed in Alberta. North American Piling's revenue has grown strongly over time, with compound annual growth of 19 per cent. in the period from 2004 to 2013. Unsurprisingly for a construction business exposed to the resources industries, this growth has been impacted by market cycles; after reaching a peak of CDN$162 million in 2008, revenue decreased to a trough of CDN$69 million in 2010 before increasing to a record CDN$236.5 million in 2013.

Summary financial information on North American Piling

The summary financial information set out below has been extracted without material adjustment from North American Piling's historic financial information for the years ended 31 March 2011, 31 March 2012 and 31 March 2013.

	2011 CDN $m	2012 CDN $m	2013 CDN $m
Combined income statement
Continuing operations
Revenue	105.6	185.3	236.5
EBITDA	10.0	35.3	46.3
Operating profit	3.5	28.0	38.5
Combined balance sheet
Working capital	23.5	29.2	38.4
Property, plant and equipment	36.5	38.6	41.3
Intangible assets	16.0	14.6	13.2
Other liabilities	(6.4)	(6.3)	(13.3)
Net assets	69.6	76.1	79.6

In the year ended 31 March 2013, North American Piling benefitted from buoyant market conditions and a number of large contracts resulting in an exceptionally good year, achieving EBITDA of CDN$46.3 million (£29.3 million) and an operating profit of CDN$38.5 million (£24.4 million) on revenue of CDN$236.5 million (£149.7 million). Following a particularly strong performance for the year ended 31 March 2013, the Directors are assuming a lower level of profitability for North American Piling for the year ending 31 March 2014. Net assets at 31 March 2013 amounted to CDN$79.6 million (£50.4 million).

Background to and reasons for the Acquisition

Keller's stated strategy is to extend its global leadership in specialist ground engineering through both organic growth, particularly in developing geographic regions, and targeted acquisitions. There are four key elements to the strategy:

·    the transfer of technologies and methods within Keller's current geographic regions;

·    Keller's design and build capability and ability to offer alternative solutions;

·    expansion into new, higher-growth geographic regions; and

·    the acquisition and development of new technologies and methods.

As part of this strategy, the Board has identified Canada as a key target market for Keller, given its relative economic stability, exposure to natural resources, what the Directors believe to be a comparatively under-developed geotechnical market and its proximity to the US, where Keller is the clear market leader in ground engineering. The Group's North American business has performed an increasing amount of non-piling work in Canada in recent years and in the year ended 31 December 2012, Keller generated record sales in Canada of CDN$40 million. In addition, in January 2013, Keller acquired Geo-Foundations, a Toronto-based specialist geotechnical contractor with annual revenues of approximately CDN$20 million, which offers micro-piling, ground anchors, and specialty grouting services, primarily in Ontario. Whilst well established in the US, many of the services performed by Keller are still not widely available in the Canadian market and are not undertaken by North American Piling. The Directors believe that an increasing market exposure in Canada to the techniques performed by Keller offers significant organic growth potential over time.

Against this background, the Directors believe that the Acquisition represents an attractive opportunity to acquire a complementary piling business and to build substantially on Keller's existing presence in Canada.

The Directors believe that the Acquisition will add value for Shareholders by:

·    bringing into the Group a market leading business, positioned in growth markets offering attractive margins;

North American Piling's EBITDA margins have averaged around 19 per cent. in the period from 2004 to 2013, significantly above the average EBITDA margin of Keller's existing North American business over the same period. The Directors believe that these comparatively high margins can be attributed to North American Piling's strong market presence, and its ability to perform challenging work for customers in end markets for whom safety, quality and reliability are key.

·    increasing the Group's exposure to the North American energy and resources sector, including the Alberta oil sands segment, positioning it to benefit from growing longer-term demand from this sector;

In common with Keller, North American Piling is focused on the non-residential construction market, with around 50 per cent. of its revenue in the three years ended 31 March 2013 derived from work performed in Alberta, in part related to oil sands projects. The remaining Canadian revenue was mainly derived from Ontario, Saskatchewan and British Columbia and was largely non-oil resource-related.

Canada is ranked third in the world for oil reserves, with 97 per cent. of these reserves in the oil sands, which are found in three deposits covering areas of Alberta, north and east of Edmonton. Approximately 90 per cent. of the crude oil production in Canada is produced in Western Canada, of which 60 per cent. is derived from the oil sands. This is forecast to increase to more than 80 per cent. over the next 20 years. (Source: Canadian Association of Petroleum Producers).

The Directors believe the Acquisition will increase and broaden the Group's exposure to the North American energy and resources market which will allow the Enlarged Group to benefit from the ongoing investment in Canada's resource industry.

·    providing the opportunity to develop broader customer relationships and secure new customers;

North American Piling has a wide and diverse customer base which it served in the course of undertaking approximately 250 projects in the year to 31 March 2013. North American Piling's larger customers include leading engineering, procurement and construction contractors and project owners in Canada, a number of whom are global businesses which are already served by Keller in markets outside of Canada.

·    expanding the Group's presence in the relatively under-developed Canadian geotechnical segment; and

The Directors believe that the Canadian market for specialty geotechnical services is less developed than those in the US and Europe. Some of the Group's techniques are not widely available in Canada and remain niche services. The Directors believe that an increasing market acceptance of these techniques in Canada offers significant long-term organic growth potential. While North American Piling operates across Canada, a significant part of its activities are focused on the piling opportunities of the oil and natural resources market. Keller expects to have the opportunity to accelerate the growth of its existing geotechnical business into this sector and throughout Canada's other construction markets. This will be facilitated by support from Keller's existing US business.

·    delivering attractive financial metrics, including an immediate and significant enhancement in earnings per share.

The Acquisition will reflect an enterprise value to EBITDA multiple of between 4.9 and 6.9 based on the EBITDA earned in the year to 31 March 2013 depending on the amount of additional deferred contingent consideration paid pursuant to the Acquisition.

Overall, the Directors believe that North American Piling will support the Group's growth and strategic objectives and will help to consolidate Keller's position as a leading independent ground engineering specialist, building on its existing position in North America. The Acquisition is expected to enable the Group to establish a significant market presence in Canada and broaden its geographic reach in the country's high growth regions, including the resource-rich regions of Western Canada. The Directors believe that North American Piling's market position, resources and customer network should also enable Keller to accelerate the sales growth of its wider product range throughout Canada.

In summary, the Directors believe that the Acquisition has a clear strategic rationale that is expected to yield benefits for Shareholders, customers and employees.

Current trading and prospects

Keller

On 15 May 2013, Keller released its trading update for the period 1 January 2013 to 14 May 2013 which stated in relation to Keller's current trading and prospects:

"As anticipated in our full-year results announcement in March, economic conditions across our global construction markets continue to be varied. We remain optimistic about a progressive strengthening of the North American construction markets, assuming that the wider US fiscal position does not worsen. Whilst economic uncertainty in Europe continues to hold back a recovery in its construction markets, we have seen no further deterioration in market conditions since the start of the year. Elsewhere, the two-speed construction market in Australia continues, whilst in Asia we continue to see good opportunities.

"Keller has had a strong start to the year, helped by the successful completion of a number of major projects, good contract performance overall and relatively benign winter weather in our markets in North America. This has resulted in both revenue and profit in the first four months being better than the Board expected at the time of announcing the Group's 2012 preliminary results.

"After adjusting for the exceptionally large Wheatstone project, which was awarded in January 2012 and on which we have only recently mobilised, order intake for the year to date has been at a similar level to the same period last year. Accordingly, the order book for work to be executed over the next 12 months is broadly in line with this time last year.

"Looking ahead to the rest of the year, the Board expects to see a continuation of recent progress."

Since the update on 15 May 2013, there has been no significant change in the Group's trading and prospects.

North American Piling

In the 12 months to 31 March 2013, being the end of the last period covered by the Accountant's Report, North American Piling benefitted from a buoyant market and a number of large contracts, as a result of which revenue was up by 28 per cent. on the previous year to CDN$236.5 million (£149.7 million) and EBITDA was up by 31 per cent., to CDN$46.3 million (£29.3 million). Following a particularly strong performance for the year ended 31 March 2013, the Directors are assuming a lower level of profitability for North American Piling for the year ending 31 March 2014. Since 1 April 2013, North American Piling has continued to trade well and had a robust order book at the end of May 2013.

Management of the Enlarged Group

Following Completion, North American Piling will be run by Bernie Robert, the chief executive officer, and Jim Humphries, the chief operating officer, who collectively have substantial experience of the industry and North American Piling specifically. Both individuals have played key roles in the expansion of North American Piling in recent years and in the development and implementation of its strategy, which has focused on organic growth complemented by a number of strategic bolt-on acquisitions. Reporting to them, North American Piling has an experienced management team and skilled employees, who are expected to contribute further to the success of the Enlarged Group.

Within the Enlarged Group, North American Piling will form part of Keller's North American division, reporting directly into the managing director of Keller North America. The divisional management team of Keller North America has a strong track record of growing its business both organically and through acquisitions.

Key terms of the Acquisition

The Acquisition Agreement provides that:

a)   North American Piling will be acquired by the Purchaser;

b)   the initial consideration payable to the Seller for North American Piling will be CDN$227.5 million (£144.0 million), on a cash and debt free basis, with up to a further CDN$92.5 million (£58.5 million) payable in deferred contingent consideration depending upon North American Piling's financial performance in the three year period following Completion. The deferred contingent consideration is payable by reference to North American Piling's EBITDA (as such term is defined in the Acquisition Agreement) as follows:

(i)  a maximum of CDN$30 million (£19.0 million) conditional upon reaching an annualised EBITDA of CDN$45 million in the period from Completion to 30 June 2014. This amount is reduced by CDN$2 for every CDN$1 by which this EBITDA is below CDN$45 million, falling to zero at an EBITDA of CDN$30 million;

(ii) a maximum of CDN$27.5 million (£17.4 million) conditional upon reaching an EBITDA of CDN$45 million in the year from 1 July 2014 to 30 June 2015. This amount is reduced by CDN$1.83 for every CDN$1 by which EBITDA is below CDN$45 million, falling to zero at an EBITDA of CDN$30 million; and

(iii)   a payment of CDN$0.50 for every CDN$1 by which the cumulative EBITDA earned over the initial three year period following Completion exceeds CDN$135 million. This amount is capped at CDN$35 million (£22.1 million) and is payable in stages during the course of this three year period.

c)   the initial consideration payable for North American Piling is subject to a post Completion adjustment depending on the actual levels of working capital, net debt and capital liabilities relating to equipment leases of North American Piling as at Completion; and

d)   Completion is conditional upon, inter alia:

(i)  the passing of the Resolution at the General Meeting;

(ii) Admission; and

(iii)            satisfying or obtaining the Canadian Competition Act Clearance.

Financing of the Acquisition

The Acquisition is being funded through a combination of the net proceeds of the Placing, together with the drawdown of some of the available funds under the New Bank Facility and  existing bank facilities.

The Placing, which has been underwritten by Investec and Jefferies, will raise gross proceeds of £58.7 million. The Placing Price represents a discount of 1.8 per cent. to the middle market price as derived from the London Stock Exchange as at the close of business on 10 June 2013. The Placing will complete on 14 June 2013 and is not conditional on the Resolution being passed or completion of the Acquisition. In the event that the Acquisition does not complete and to the extent that opportunities for similar acquisitions have not been identified by the Board, the Board will review Keller's funding structure and will consider its options which will include using the proceeds for general corporate purposes and/or returning surplus cash to Shareholders. Any return of capital may have adverse tax implications for Shareholders.

Financial impact of the Acquisition and the Placing

The impact of the Placing, the drawdown of some of the available funds under the New Bank Facility and existing bank facilities and the Acquisition would have led to a pro forma movement in net assets from £335.7 million to £387.8 million as at 31 December 2012, as set out in further detail in the unaudited pro forma statement of net assets in the Circular.

It is expected that the Acquisition will be immediately and significantly earnings enhancing. However, no statement in this announcement should be interpreted to mean that the future earnings per share of the Enlarged Group will necessarily match or exceed the historical published earnings per share of Keller.

In light of the scale and size of the proposed Acquisition, the Directors believe that Keller has taken a prudent approach to financing the Acquisition and associated expenses through a combination of equity and debt, which balances a conservative financing structure and return for Shareholders. Taking into account the cyclicality of the industry in which the Enlarged Group will operate, the Board believes it is prudent to create a diverse funding structure that combines existing borrowing facilities, the New Bank Facility and the Placing to provide both for the Acquisition and for the continued financial strength and flexibility of the Enlarged Group.

The Directors expect pro forma leverage on Completion to be 1.3 times net debt to trailing 12-months EBITDA (to 31 March 2013) of the Enlarged Group, reducing significantly by the end of the first full financial year after Completion.

Dividends and dividend policy

Following Completion, the Board of Keller intends to maintain its progressive dividend policy, which takes into account both the underlying growth in Group earnings and investment opportunities.

DEFINITIONS

The following definitions apply throughout this document, unless the context requires otherwise:

"Acquisition"

the proposed acquisition by 0971408 B.C. Ltd (a newly incorporated wholly-owned subsidiary of the Company), of North American Piling pursuant to the Acquisition Agreement;

"Acquisition Agreement"

the conditional business sale and purchase agreement dated 11 June 2013 between (1) the Company, (2) the Purchaser and (3) North American Energy Partners regarding the sale and purchase of North American Piling;

"Admission"

the admission of the Placing Shares to the Official List becoming effective in accordance with the Listing Rules and the admission of such shares to trading on the main market of the London Stock Exchange for listed securities becoming effective in accordance with the Admission and Disclosure Standards;

"Board"

the board of directors of the Company;

"Canadian Competition Act"

the Competition Act under the federal laws of Canada, as amended and for the time being in force;

"Canadian Competition Act Clearance"

either: (a) the Commissioner of Competition or his designee issuing an advance ruling certificate under section 102(1) of the Canadian Competition Act, or (b)(i) the statutory waiting period prescribed under section 123 of the Competition Act having expired or having been terminated in accordance with that section, or the obligation to submit a notification having been waived pursuant to section 113(c) of the Canadian Competition Act, and (ii) the Commissioner of Competition or his designee having issued a letter to Keller confirming that the Commissioner of Competition does not, at such time, intend to bring an application to the Competition Tribunal under section 92 of the Canadian Competition Act;

"CDN$"

Canadian dollars;

"Circular"

the circular to be sent to Shareholders containing details of the Acquisition and the notice of the Keller General Meeting at which the Resolution will be proposed for the approval of the Acquisition by Keller Shareholders;

"Company" or "Keller"

Keller Group plc;

"Completion"

completion of the Acquisition in accordance with the terms of the Acquisition Agreement;

"Directors"

the current directors of the Company;

"Disclosure and Transparency Rules" or "DTR"

the Disclosure and Transparency Rules made under Part VI of FSMA, as amended from time to time;

"EBITDA"

earnings before interest, taxes, depreciation and amortisation;

"Enlarged Group"

the post-Acquisition new enlarged group of Keller;

"FCA" or "Financial Conduct Authority"

the United Kingdom Financial Conduct Authority;

"General Meeting"

the General Meeting of Keller to be held at the offices of Investec Bank plc, 2 Gresham Street, London EC2V 7QP on 28 June 2013 at 10.00 a.m., notice of which is set out at the end of the Circular;

"Geo-Foundations"

Geo-Foundations Contractors Inc., an indirectly wholly-owned subsidiary of the Company acquired by the Group in January 2013;

"Group" or "Keller Group"

the Company and each of its subsidiaries and subsidiary undertakings from time to time;

"Investec"

Investec Bank plc, a limited company incorporated under the laws of England and Wales with registered number 00489604;

"Jefferies"

Jefferies International Limited, a limited company incorporated under the laws of England and Wales with registered number 01978621;

"Listing Rules"

the listing rules made by the FCA under Part VI of FSMA (as amended from time to time);

"London Stock Exchange"

the London Stock Exchange plc;

"New Bank Facility"

the facility agreement dated 10 June 2013 entered into between amongst others (1) the Company, (2) its subsidiaries, (3) Lloyd's TSB Bank plc, The Royal Bank of Scotland plc, Wells Fargo Bank, N.A., London Branch and HSBC Bank plc; described in paragraph 5.1.3 of Part VII (Additional Information) of the Circular;

"North America"

the United States of America and Canada;

"North American Piling"

means certain of the assets of North American Energy Partners, Inc. that comprise North American Energy Partners' broad range of piling related solutions, including: drilled piles, driven piles, helical piles and earth retention systems, as well as pipeline anchor systems and tank services;

"Ordinary Shares"

ordinary shares of ten pence each in the capital of the Company;

"Placing"

the placing of the Placing Shares at the Placing Price;

"Placing Shares"

the 6,600,000 new Ordinary Shares to be issued at the Placing Price pursuant to the Placing;

"Placing Price"

the issue price of 890 pence per Placing Share pursuant to the Placing;

"PRA" or "Prudential Regulation Authority"

the United Kingdom Prudential Regulation Authority;

"Resolution"

the ordinary resolution to be proposed at the General Meeting and set out in the Notice of the General Meeting;

"Shareholders"

holders of Ordinary Shares;

"Sterling" or "£" or "pence"

the lawful currency of the UK;

"United Kingdom" or "UK"

the United Kingdom of Great Britain and Northern Ireland.

 

END

 

 

ACQUAUVROOANARR