Babcock International Group PLC
17 March 2000
ACQUISITION OF FBM MARINE
BY BABCOCK INTERNATIONAL GROUP PLC
Babcock Engineering Services ('BES'), a Division of Babcock
International Group PLC ('Group'), has acquired 100% of the share
capital of FBM Marine Holdings (UK) Limited ('FBM') from The Hong
Kong Parkview Group. FBM is Europe's leading supplier of fast
passenger ferries to the strongly expanding world-wide market.
It designs, builds and supports high-speed ferries and naval
patrol vessels, as well as licensing its designs around the
world. Following the acquisition, FBM will change its name to
FBM Babcock Marine Limited. In addition to its operations in the
UK, FBM has a 50/50 joint venture with the Aboitiz Group
('Aboitiz') in the Philippines, operating from efficient new
facilities to take advantage of the proximity of the Asian market
as well as low production costs. Aboitiz is a major industrial,
banking and maritime business.
BES will pay an initial consideration of £4.7 million in cash,
including the repayment of £1.7 million of borrowings. A further
£2.7 million may become payable dependent upon the value of new
orders booked over the next 15 months. The book value of net
assets acquired by BES is estimated to be £2.1 million. The last
statutory accounts, for the year to 31 March 1999, show FBM's
turnover was £15.6 million with a loss before tax of £1.2 million
(after rationalisation costs).
The acquisition is expected to contribute positively to earnings
from 2001/2002 after the business has been integrated into BES.
The Division's modern covered facilities at Rosyth will be used
to build high-speed aluminium fast ferries and paramilitary craft
up to 65m in length. BES also intends to capitalise on FBM's
plans to utilise the covered shipyard facilities at Birkenhead to
enter the market for larger, high-speed passenger/car and freight
ferries.
FBM will enhance BES's marine services activities located in the
UK and in New Zealand. It will also complement the recent
acquisition of Armstrong Technology, a leading UK marine design
consultancy, and provide a platform for growth in the maritime
high-speed market.
Commenting on this latest Group acquisition Dr T John Parker,
Chairman, said 'The acquisition of FBM, together with other
smaller, recent acquisitions, is part of the Group's strategy of
building a platform from which to grow earnings in our core
businesses. FBM fits our plans to develop the Group's operations
in high technology and marine support services, whilst leveraging
off our excellent Rosyth facilities. We believe that FBM
combined with Babcock will enjoy an exciting future in its fast-
growing global market currently expected to be worth around $1
billion per annum'.
Murray Easton, Managing Director of BES, said 'We look forward to
integrating FBM into Babcock's Engineering Services Division and
expanding its fast ferry and patrol craft, design, build and
support services business world wide'.
Enquiries
Dr T J Parker Babcock International Group PLC 01494 727 296
Murray Easton Babcock Engineering Services 01383 412131
Ginny Pulbrook Citigate Dewe Rogerson 0171 282 2945
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