Acquisition of leading US Defence business

RNS Number : 9628Z

Serco Group PLC

23 May 2019

 

Acquisition of leading provider of ship and submarine design and engineering services to US Navy; significant addition to capability and scale of Serco's defence business

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

23 May 2019

Serco Group plc

LEI: 549300PT2CIHYN5GWJ21

Serco Group plc ('Serco' or 'the Group'), the international service company, today announces that it has entered into a definitive Asset Purchase Agreement to acquire for $225m the Naval Systems Business Unit and a small number of related contracting entities (collectively, 'NSBU'), from Alion Science & Technology Corporation ('Alion') ('the Acquisition').  NSBU is a leading provider of naval design, systems engineering, as well as production and lifecycle support services to the US Navy, US Army and Royal Canadian Navy.  In the 12 months to September 2018 NSBU had revenues of $336m, which compares with Serco's North American Defence revenues in 2018 of $453m; NSBU has an order book of around $600m and a new business pipeline of over $2bn.

Commenting on the Acquisition, Rupert Soames, Serco Group Chief Executive, said: "This is an important step for Serco which materially adds to the scale and capability of our US defence business, and in particular to the maritime support segment.  Serco employs some 6,000 people in North America, of whom 2,300 work in defence, and has been providing services to the US Navy for nearly 30 years, so we know this market well.  NSBU, which employs around 1,000 people, brings world-class ship and submarine design, systems, and engineering services, production support and in-service sustainment capabilities, which are highly complementary to Serco's existing skills in ship modernisation, hardware integration and naval logistics.  The combined business will be a top tier supplier of services to the US Navy, which has recently announced plans to increase the fleet from 280 to 355 ships by 2034, and we see a long-term and growing demand for the capabilities that the combination of Serco and NSBU will be able to provide.

"We are financing the Acquisition through a mix of debt and equity which will allow us to maintain leverage well within our target range of 1-2x EBITDA, and we expect the Acquisition to be materially accretive to earnings in the first full year of ownership. 

"We greatly look forward to welcoming our new colleagues to Serco.  The current management team of NSBU will continue to run the business and lead the integration into Serco, and we know they are as excited as we are by the opportunity to create a major new supplier of maritime engineering services, combining our joint capabilities in ship and systems design, modification and sustainment."

Summary of financing arrangements and financial impact:

·    NSBU is to be acquired for $225m (approximately £173m - see Note 1) on a cash-free, debt-free basis, and subject to customary working capital and other relevant adjustments up to the date of completion.

·    The Acquisition is expected to close in the second half of 2019 and is subject to regulatory approvals, including customary Hart-Scott-Rodino ('HSR') and Committee on Foreign Investments into the United States ('CFIUS').

·    Financing is through a combination of a new committed debt facility of up to £75m, together with an equity placing for cash of up to 10% of existing share capital that is expected to raise gross proceeds of around £130m (based on yesterday's closing share price) (the 'Equity Placing').

·    Net Debt (see Note 2) for the end of 2019 was previously anticipated to be approximately £200m and leverage for covenant purposes around 1.3x; following the Acquisition, these will increase, respectively, to approximately £250m and, on a pro forma basis, to around 1.5x.

·    In 2020, which will be the first full year of ownership, NSBU is expected to contribute revenue of approximately $370m (£285m), EBITDA of $28m (£21m) and Underlying Trading Profit (UTP - see Note 3) of $27m (£20m), resulting in transaction multiplies of 0.6x, 8.1x and 8.3x, respectively.  This includes the benefit of sharing Serco's fixed overheads across a wider revenue base in North America, which we expect to be worth $3-4m of UTP in the first year.

·    The Acquisition is expected to be accretive to current analyst consensus of Underlying EPS by 7-9% in 2020, which will be the first full year of ownership.

Summary of NSBU and its combination with Serco:

·    NSBU is a leading provider of ship and submarine design, systems engineering and integration, production support and through-life sustainment services for the US Navy.  It is involved with every major ship class in the US fleet, and also provides equivalent services elsewhere within the US Department of Defense (DoD) and to other naval customers around the world, including the Royal Canadian Navy.  It has an order book of around $0.6bn (£0.5bn) and a new business pipeline of over $2bn.

·    NSBU adds high-end design and engineering capabilities to Serco's international Defence businesses and brings additional scale to our business in the US.

·    Serco Group's revenue mix from Defence will increase from 30% to around 35%, which is equivalent to approximately $1.6bn (£1.2bn) on a pro forma basis for 2018, while the Americas division as a proportion of the Group will increase from 20% to around 26%, equivalent to approximately $1.2bn (£0.9bn).

·    The Acquisition increases the Group's weighting towards large and faster-growing markets.  The US Navy plans to expand its fleet from around 280 to 355 ships by 2034, both by new build and life-extension of existing vessels, and this is likely to result in increased demand for NSBU and Serco's core capabilities.

·    The combination of NSBU with Serco's existing maritime support operations will allow us to offer services that cover the entire lifecycle of a ship: from hull architecture, systems design and production support, through to in-service upgrades and modernisation.  It also allows us to offer customers design and engineering services, as well as the ship-board installation and maintenance capability.

In summary, the acquisition of NSBU will:

·    Broaden the capabilities and increase the scale of our North American and international Defence businesses.

·    Increase our exposure to US Navy fleet expansion, which is one of the fastest-growing areas of public procurement.

·    Enable us to generate synergies through sharing our fixed overheads across a wider revenue base in North America.

·    Increase our Underlying EPS by 7-9% above current analyst consensus for 2020.

Further background on NSBU, the market for support services to the US Navy, strategic fit and rationale, financial information and funding and completion arrangements are set out later in this statement.

Rothschild & Co is acting as financial adviser to Serco Group plc.

Conference call:

A conference call for institutional investors and analysts will be held today at 8.00am on [phone] (USA: [phone]) with participant pin code 9126458.  A presentation to accompany the conference call will be available on www.serco.com shortly before.  The call will also be webcast live on www.serco.com and a replay will be subsequently available on demand.

For further information please contact Serco:

Stuart Ford, Head of Investor Relations T [phone]

Marcus De Ville, Head of Media Relations T [phone]

Notes:

1.  All figures translated at an exchange rate of £1:$1.34 for historic 2018 financials, and £1:$1.30 for all current and forecast financials.

2.  Net Debt guidance excludes lease obligations newly recognised under IFRS16, which is consistent with the covenant measure for the Group's financing facilities.

3.  Trading Profit is defined as IFRS Operating Profit excluding amortisation of intangibles arising on acquisition as well as exceptional items.  Underlying Trading Profit (UTP) additionally excludes other material one-time items.

Background on NSBU

NSBU provides services to support the design, build and through-life support of ships, submarines and other underwater vehicles.  These services include hull and systems design and integration, production and procurement management, and modernisation and upgrade engineering. 

Key capabilities include:

·           Design and engineering: focused on developing and sustaining vessels to optimize performance, cost and delivery, using core skills of naval architecture and systems engineering and integration, supported by state-of-the-art tools such as simulation-based design as well as logistics and maintenance analysis.  NSBU employs experts who have, collectively, many hundreds of years of experience designing, building and supporting combat and mission systems.

·           Procurement and production management: includes highly trained and specialist shipyard engineering staff, procedures and processes, which provide comprehensive oversight of build and systems integration, testing and trials support, and regulatory body coordination and certification.

·           In-service and lifecycle support: oversee modernisation and upgrade, providing assessment teams, technical resolution and maintenance specialists, and develop lifecycle and sustainment solutions to improve readiness and upgrade mission-critical capacity.

NSBU brings together deep experience and strong customer relationships across the defence and naval industries.  It supports its customers on a vendor-agnostic basis to provide unbiased opinion on a full lifecycle approach and across all ship mission systems.  It has also developed its own proprietary design packages, tools and software to deliver highly specialised capabilities.

Key customers include the US Naval Sea Systems Command (NAVSEA), the US Office of Navy Research, the US Army and the US Coast Guard, as well as the Royal Canadian Navy and research agencies.

Major contracts include:

·           SEA 21: in-service support for the US Surface Warfare Directorate (SEA 21), managing critical lifecycle maintenance and modernisation to all non-nuclear US Navy surface ships with the exception of the Littoral Combat Ship (LCS) classes;

·           SEA 05: ship design services for the Naval Systems Engineering Directorate (SEA 05), from early stage and alternatives analysis, through to provision of technical and in-service support, provided across aircraft carriers, surface combatants, amphibious and auxiliary ships;

·           PMS 377: multiple programmes for the Navy's Amphibious Warfare Program (PMS 377) including procurement, technical management, integrated logistics and operations support to amphibious assault, multi-purpose (LHD Class) and Landing Craft Utility (LCU) fleets;

·           Team Submarine: US Navy's Team Submarine Enterprise Wide Contract Support Services (Team Sub) contract awarded under the SeaPort-e contract vehicle, providing engineering, technical, logistics, lifecycle and programme management support across submarines, systems and payloads;

·           PMS 400 / DDG-51: involvement since inception for the Shipbuilding Command (PMS 400) in the design, production oversight, testing and inspection, in-service support and maintenance of the DDG-51 destroyer class configuration and technical baselines;

·           LCU 2000: life extension support for Landing Craft Utility (LCU) vessels of the US Army, including engine room, auxiliary equipment, galley and accommodation spaces;

·           JSS: design development and integration support to the Joint Support Ship (JSS) Program of the Royal Canadian Navy.

NSBU has approximately 1,025 employees operating from 21 facilities and multiple other customer locations across the United States, Canada and internationally.  Serco is intending that the senior management team as well as all operational staff of NSBU will transfer to Serco, and the existing management team will lead the integration work and work alongside a dedicated transition team from Serco.  Significant effort has been committed to planning for transition and integration of the Acquisition.  Serco is highly regarded as an employer in North America; terms and benefits packages are similar between Serco and NSBU, and we believe there will be a strong cultural fit as well.   We look forward to welcoming our new colleagues and providing the opportunities of being part of a larger, broader and deeper international defence maritime services business.

The market for support services to the US Navy

The US Navy's Fiscal Year 2020 plan sets out the aim of expanding the Navy fleet to 355 ships by 2034; this is a substantial increase from the 2017 plan of 308 ships, and from the current inventory of around 280 ships (including aircraft carriers, submarines, surface combatants, amphibious ships, and combat logistics ships).  Achieving the goal of a 355-ship navy is forecast to require a shipbuilding budget growing from an average of $20.3bn per year in the period 2020-24 to $26-28bn per year beyond.  If fully carried out, the proposed shipbuilding plan would represent the largest increase in naval capability since the Reagan Administration in the 1980s.

In the specific market of Naval Sea Systems Command (NAVSEA) Systems Engineering & Technical Assistance (SETA) services, NSBU is a market leader with a long-held position across multiple platforms.  In recent years, NAVSEA SETA expenditure has remained stable whilst Defence expenditure as a whole was declining.  Looking forward, SETA services are expected to grow both in absolute terms and as a share of total US defence expenditure.  A key driver of demand for SETA services is that the US Navy cannot reach its goal of a 355-ship navy with only new ship construction.  It plans to supplement new ship construction with life-extensions of existing platforms.  For example, all DDG-51 destroyers are to be life-extended to 45 years, 5-10 years longer than indicated in previous plans, and up to 7 Los Angeles class submarines will be life-extended from 33 years to 43 years.  The Navy Service Life Extension Program (SLEP) to support the proposed plan is therefore expected to result in a substantial increase in funding for sustainment efforts in addition to the increased budget for new ship builds.

As a general rule, for every $1m spent on the build of a naval vessel, $2.3m will be spent on through-life sustainment and modernisation.  The US Navy's baseline sustainment cost is forecast to be $24bn in 2020, rising to $30bn in 2024 and $40bn by 2034.  NSBU, as a leader in providing in-service engineering and lifecycle support for submarine and surface combatant vessels is expected to benefit from this projected growth.

NSBU has also developed skills in 'next generation' platforms such as Unmanned Surface Vehicles (USVs) and Unmanned Underwater Vehicles (UUVs).  The Navy has outlined a focus and significant resources to these areas, which are in addition to the 355-ship navy target and expected to be high growth market segments.

Strategic fit and rationale

NSBU and Serco capabilities are highly complementary.  Serco's existing Navy business focuses predominantly on shipboard and shore-based modernisation and upgrade programmes.  Our current work includes the supply of skilled labour (such as technicians, welders and fitters) to assemble, integrate and install systems to upgrade and modernise ships to the Navy's designs and specification.  NSBU's business is more design and engineering oriented, providing world-class hull and systems design and integration, test and evaluation, production and procurement management, and the engineering related to modernisation and upgrade programmes.  The combination of these two sets of capabilities will allow us to offer our customers a much broader and deeper range of skills and services.  It would also significantly increase the scale of both companies' business, making the combined operation a top tier supplier of services to the US Navy with a full-spectrum offering across defence platforms where growth in both construction and sustainment markets is expected in the years ahead.

Serco knows NSBU's customers well, and has existing contracts in place with NAVSEA, which is NSBU's principal customer.  Serco already performs work on many of the vessels that NSBU has helped to design and supported the build and sustainment.  We believe that combining the high-end engineering skills of NSBU with Serco's installation and maintenance capabilities will be highly attractive to our Navy customers both in the US and in other countries.

Scale, and the ability to use overheads such as IT, finance and business development spend are important in Government services.  NSBU's $336m of revenue when added to Serco's existing $453m of defence revenue in North America nearly doubles the size of our defence business in the region, and materially increases the scale of our Group's international defence business.

Costs efficiencies are expected to be delivered as Serco's shared services and overhead functions are leveraged across operating a larger combined business.  The majority of these efficiencies will be passed back to customers with Cost-Plus contracts via lower allocation of overhead costs; however, margins on Fixed Price contracts will improve as a result of the overall more efficient cost base, and we estimate the benefit of this will be $3-4m in 2020.  Furthermore, the improved cost efficiency of the enlarged business should result in cost advantages in terms of pricing future bids.

Serco's strategic review initially conducted in 2014 and updated in 2018 clearly identified the attractiveness of expanding our exposure to the US defence market.  The NSBU Acquisition delivers this ambition, increasing the proportion of Serco's revenue arising in the North America division from 20% to around 26%, and at Group level increases the defence sector from 30% to approximately 35% of revenues.

Financial information

For its financial year end 30 September 2018, NSBU had revenue of $336m (£250m), EBITDA of $21.6m (£16.1m) and Underlying Trading Profit (UTP) of $20.2m (£15.1m).  For Serco's financial year ending December 2020, which is anticipated to be the first full year of ownership, NSBU is forecast to contribute revenue of approximately $370m (£285m), EBITDA of $28m (£21m) and UTP of $27m (£20m).  On the purchase consideration of $225m (£173m), this implies transaction multiplies of 0.6x, 8.1x and 8.3x, respectively.  These expectations include first year cost efficiencies forecast to be $3-4m.  The adoption of IFRS16 is estimated within the forecasts to have increased UTP by less than $1m, with an immaterial net impact on PBT.

The forecast growth in NSBU's 2020 revenue is based upon increased workload that is largely already contracted for in its order book, and is before the potential for revenue synergies.  NSBU will be quickly integrated into Serco's US Defence business, but our projections are that its standalone revenue could grow at around 5% CAGR over the medium-term.  NSBU's UTP margin in recent years has been around 6%, with the potential for this to expand through the benefit of operational leverage, changes in mix and cost efficiencies.

The increase in Serco's 2020 Net Finance Costs, reflecting the debt funding element of the purchase consideration as described further below, together with the effect of IFRS16, is estimated to be £2-3m.  The effective tax rate applicable to the forecast increase in Underlying Profit Before Tax is estimated to be around 10-15%, which takes into account the funding structure and US tax deductibility of goodwill amortisation.

The Acquisition is expected to be materially accretive to earnings in the first full year of ownership.  The current analyst consensus for Serco's Underlying EPS for 2020 is 7.1p; taking into account the Equity Placing (as described further below), earnings accretion is expected to be 7-9%.

Excluding costs directly associated with the Equity Placing arrangements as described further below, other transaction costs and fees of approximately £4m will be incurred as exceptional costs in 2019.  Transition and integration costs of a further £4m are expected to be incurred as exceptional costs across 2019 and 2020.

NSBU's revenue mix by contract type is over 80% on a Cost-Plus (CP) basis, with the balance split between Firm Fixed Price (FFP) contracting and a small proportion on a Time & Materials (TM) basis.  NSBU has an order book (ie a signed, contracted backlog) of $0.6bn (£0.5bn), representing around 2x annual revenue.  Reflective of the average tenure of contracts, around 60% of current annual revenue will require extension or rebid over the course of the next two and a half years through to December 2021.  NSBU has a new business pipeline (of bids in capture and in proposal/evaluation) of over $2bn.

The value of NSBU's gross assets, excluding cash balances, was $75m (£56m) at 30 September 2018.

Funding and completion arrangements

NSBU is to be acquired for $225m (approximately £173m) on a cash-free, debt-free basis, and subject to customary working capital and other relevant adjustments up to the date of completion.

The purchase consideration will be financed by a combination of an equity placing for cash of new ordinary shares (the 'Equity Placing') which is expected to raise gross proceeds of around £130m, together with a new committed debt facility of up to £75m.

As detailed in a further announcement to be issued shortly, the Equity Placing is for up to 111,216,400 shares, representing up to 10% of existing share capital.  If the maximum number of shares were issued, this would increase the weighted average number of shares for diluted EPS purposes from previous guidance of 1,145m to approximately 1,212m for 2019, fully annualising to 1,256m for 2020.

A new committed three-year term loan for up to £75m has been agreed with certain of the Group's existing lenders, with an expected interest cost of approximately 2-3% based upon projected levels of leverage.  All other terms and covenants are consistent with existing facilities.

Serco previously guided to Net Debt (excluding lease obligations newly recognised under IFRS16, which is consistent with the covenant measure for the Group's financing facilities) for the end of 2019 of approximately £200m, which would increase to around £250m following the Acquisition.  Leverage for covenant purposes was previously expected to be approximately 1.3x, which on an underlying pro forma basis would increase by around 0.2x to approximately 1.5x following the Acquisition.

The Acquisition is subject to certain regulatory approvals, including customary Hart-Scott-Rodino ('HSR') and Committee on Foreign Investments into the United States ('CFIUS').  The Acquisition is expected to close in the second half of 2019.  The Equity Placing is not conditional on completion of the Acquisition.  In the event that the Acquisition does not complete, Serco will retain the Equity Placing proceeds to provide financial flexibility should another attractive acquisition opportunity arise.  If no such opportunities arise in the medium term, Serco would consider appropriate methods to return excess capital to shareholders.

Ends

About Serco

Serco is a leading provider of public services.  Our customers are governments or others operating in the public sector.  We gain scale, expertise and diversification by operating internationally across five sectors and four geographies: Defence, Justice & Immigration, Transport, Health and Citizen Services, delivered in UK & Europe, North America, Asia Pacific and the Middle East.

More information can be found at www.serco.com

About Alion

Alion combines large-company resources with small business responsiveness to design and deliver engineering solutions across six core capability areas including: C5 systems, ISR solutions, Artificial Intelligence, Cyber Defence / Offense operations, Electronic Warfare technology, and Live Virtual Constructive (LVC) training solutions.  Based just outside of Washington, D.C., we help our clients achieve practical innovations by turning big ideas into real solutions.

To learn more, visit www.alionscience.com

Disclaimer

This announcement contains statements which are, or may be deemed to be, "forward-looking statements" which are prospective in nature.  All statements other than statements of historical fact are forward-looking statements.  Generally, words such as "expect", "anticipate", "may", "could", "should", "will", "aspire", "aim", "plan", "target", "goal", "ambition", "intend" and similar expressions identify forward looking-statements.  By their nature, these forward-looking statements are subject to a number of known and unknown risks, uncertainties and contingencies, and actual results and events could differ materially from those currently being anticipated as reflected in such statements.  Factors which may cause future outcomes to differ from those foreseen or implied in forward-looking statements include, but are not limited to: general economic conditions and business conditions in Serco's markets; contracts awarded to Serco; customers' acceptance of Serco's products and services; operational problems; the actions of competitors, trading partners, creditors, rating agencies and others; the success or otherwise of partnering; changes in laws and governmental regulations; regulatory or legal actions, including the types of enforcement action pursued and the nature of remedies sought or imposed; the receipt of relevant third party and/or regulatory approvals; exchange rate fluctuations; the development and use of new technology; changes in public expectations and other changes to business conditions; wars and acts of terrorism; and cyber-attacks.  Many of these factors are beyond Serco's control or influence.  These forward-looking statements speak only as of the date of this announcement and have not been audited or otherwise independently verified.  Past performance should not be taken as an indication or guarantee of future results and no representation or warranty, express or implied, is made regarding future performance.  Except as required by any applicable law or regulation, Serco expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward looking statements contained in this announcement to reflect any change in Serco's expectations or any change in events, conditions or circumstances on which any such statement is based after the date of this announcement, or to keep current any other information contained in this announcement.  Accordingly, undue reliance should not be placed on the forward-looking statements.

This announcement has been issued by, and is the sole responsibility, of Serco.  No representation or warranty express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by any other party as to or in relation to, the accuracy or completeness of this Announcement or any other written or oral information made available to or publicly available to any interested party or its advisers, or any other statement made or purported to be made by any other party in connection with Serco, the Equity Placing, the ordinary shares of Serco issued pursuant to the Equity Placing (the 'Placing Shares') or the Acquisition and any liability therefor is expressly disclaimed.

The Placing Shares have not been and will not be registered under the United States Securities Act of 1933, as amended ('Securities Act') or the securities laws of any other jurisdiction of the United States, and may not be offered, sold or transferred, directly or indirectly, in the United States absent registration under the Securities Act or an available exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and the securities laws of any other jurisdiction of the United States.  No public offering of the Placing Shares is being made in the United States, United Kingdom or elsewhere.

No prospectus will be made available in connection with the matters contained in this announcement and no such prospectus is required (in accordance with the Prospectus Directive) to be published.  Persons needing advice should consult an independent financial adviser.

Statements contained in this announcement regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future.  Any forward-looking statements in this announcement reflect Serco's view with respect to future events as at the date of this announcement and are subject to risks relating to future events and other risks, uncertainties and assumptions relating to the conditions to the Acquisition being satisfied, including regulatory approval of the Acquisition, increased leverage as a result of the Acquisition, Serco's ability to integrate the businesses and retention of key personnel, the successful realisation of the anticipated synergies and strategic benefits and an adequate return on its investment from the Acquisition, the increased regulatory burden facing the enlarged Group, maintenance of performance and momentum in its business during the period prior to Acquisition and throughout integration and Serco's operations, result of operations, financial condition, growth, strategy, liquidity and the industry in which Serco operates, and the other risk factors highlighted in Serco's 2018 Annual Report and risks associated with its operations.  No assurances can be given that the forward-looking statements in this announcement will be realised.  Serco's actual performance, results of operations, internal rate of return, financial condition, distributions to shareholders, the development of its financing strategies and the results or eventual success of the Acquisition may differ materially from the impression created by the forward-looking statements contained in this announcement.  In addition, even if Serco's actual performance, results of operations, financial condition, distributions to shareholders and results of the Acquisition are consistent with the forward-looking statements contained in this announcement, those results or developments may not be indicative of results or developments in subsequent periods.

This announcement does not identify or suggest, or purport to identify or suggest, the risks (direct or indirect) that may be associated with an investment in the Placing Shares.  Any investment decision to buy Placing Shares in the Equity Placing must be made solely on the basis of publicly available information, which has not been independently verified.

The distribution of this announcement and the offering of the Placing Shares in certain jurisdictions may be restricted by law.  No action has been taken by any party that would permit an offering of such shares or possession or distribution of this announcement or any other offering or publicity material relating to such shares in any jurisdiction where action for that purpose is required.  Persons into whose possession this announcement comes are required by Serco to inform themselves about, and to observe, such restrictions.

The price of shares and the income from them may go down as well as up and investors may not get back the full amount invested on disposal of the Placing Shares.

This Announcement does not constitute a recommendation concerning the Equity Placing.

N. M. Rothschild & Sons Limited ('Rothschild & Co'), which is authorised and regulated by the Financial Conduct Authority in the United Kingdom, is acting as financial adviser to Serco and no one else in connection with the Equity Placing, the Placing Shares and the Acquisition, and will not be responsible to any person other than Serco for providing protections afforded to clients of Rothschild & Co nor for providing advice in relation to the Equity Placing, the Placing Shares and the Acquisition.

 

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