Acquisition
Scott Wilson Group plc
07 December 2006
For immediate release 7 December 2006
Scott Wilson Group plc
Further acquisitions enhance capability in the property, nuclear, petrochemical
and pharmaceuticals sectors
Scott Wilson Group plc ("Scott Wilson" or the "The Group"), the international
consultancy offering integrated professional services in the transportation,
property, environmental and natural resources sectors, today announces the
completion of the acquisitions of Cameron Taylor Group Limited ("Cameron
Taylor") and DGP International Limited ("DGP") for a maximum aggregate
consideration of £30.2m.
Highlights:
- Acquisitions of Cameron Taylor and DGP for a combined maximum
consideration of £30.2m
o Cameron Taylor significantly enhances the Group's presence in the UK
property sector
o DGP brings new skills within the nuclear, petrochemical and
pharmaceuticals sectors and strengthens the Group's market presence in the
North West of England and within the water and waste management sectors
o Both businesses have a clear sector focus and strong management teams
that are remaining after acquisition. They are experiencing significant
growth and achieving attractive operating margins
- Group current trading remains in line with the indications given at
the time of the AGM. The Group expects to announce its interim results on 16
January 2007 at which time management will give a full update on current
trading
This takes to five the number of completed acquisitions since Scott Wilson
floated earlier this year. Each has broadened the Group's presence in attractive
segments in keeping with the stated strategy of the Group. The Group retains
significant capacity to finance both acquisitions and continued organic growth.
Commenting on today's announcement, Geoff French, Executive Chairman of Scott
Wilson, said:
"At the time of our flotation, the Board set out a clear strategy for achieving
sustained growth, both organic and by acquisition, in revenue, margins and
shareholder returns by building on the Group's position as one of the leading
international engineering consultancies. Today's announcement highlights further
significant progress in delivering complementary acquisitive growth to the
Group."
"We are delighted to have made these high quality and strategically important
acquisitions. Both businesses bring expanded geographical coverage and sectoral
expertise. We look forward to realising operating synergies as we integrate
these businesses into our existing divisions."
For further information please contact:
Scott Wilson Group plc www.scottwilson.com
Geoff French, Chairman 01256 310 200
Stephen Kimmett, Finance Director
Smithfield 020 7360 4900
Reg Hoare / Katie Hunt 07831 406117 / 07884 494112
Brewin Dolphin Securities 0131 529 0272
Sandy Fraser
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Reasons For and Benefits of the Acquisitions
Both Cameron Taylor and DGP are highly regarded businesses experiencing strong
growth with a clear sector focus, attractive operating margins and strong
management teams who are remaining after acquisition.
Cameron Taylor substantially increases Scott Wilson's capability in the UK
property sector, with annualised sector revenues of approximately £54m when
combined with our existing businesses, making Scott Wilson a top 10 ranked
consultancy in this sector. John Horgan, currently chief executive of Cameron
Taylor, will chair Scott Wilson's Property Sector Board, which will co-ordinate
the Group's activities within the sector across all of its operating Divisions.
DGP will bring new skills within the nuclear, petrochemical and pharmaceutical
sectors and strengthens the Group's market presence in the North West of England
and within the water and waste management sectors.
The Directors anticipate that the acquisitions will enable the enlarged Scott
Wilson Group to benefit from a significantly improved market profile with a
wider client base, enhanced complementary skills and additional opportunities to
undertake major assignments both in the UK and overseas.
Additional Information on Cameron Taylor and DGP
Acquisition of Cameron Taylor
Based in London, Cameron Taylor has established a particularly strong reputation
and market presence within the UK property sector. It provides a broad range of
consulting engineering services from 10 UK offices, employing 330 staff.
Current flagship projects include Great Western Quarter in West London, a
diverse development for Barratt, designs for sustainable tri-generation plants
for Tesco, new offices for The Crown Estate on Regent Street and Rio Tinto plc
on St James's Square, the University of Art and Design which is part of the
regeneration of Kings Cross with Argent, the new Planetarium at the Royal
Greenwich Observatory and conservation projects at both Cambridge and Oxford
Universities.
In the year ended 30 June 2006, Cameron Taylor had revenues of £20.5m,
underlying EBIT* of £1.4m, operating margin* of 7% and profit before taxation of
£0.9m. Net assets were £5.0m at this date.
*Underlying EBIT and operating margin are stated after adding back the results
of discontinued operations of £0.1m and other non-recurring items of £0.4m.
Since its year end, Cameron Taylor has continued to enjoy strong trading with
double digit revenue growth, a continued improvement in operating margin and a
secure forward order book of approximately £21m. The Directors anticipate that
this will be reflected in a significant uplift in both revenue and operating
profit in the current financial year.
Consideration paid upon completion on 7 December 2006 was £10.8m in cash and
loan notes and £3.5m by the issue of 1,499,808 new Ordinary Shares in Scott
Wilson to shareholders in Cameron Taylor. Further consideration of £1.2m will be
payable in 12 months from completion to shareholders of Cameron Taylor, to be
satisfied entirely by the issue of additional Scott Wilson Ordinary Shares
subject to a £1 for £1 adjustment in the event that net assets are less than
£6.6m. Cameron Taylor's assets at completion include cash/near cash of £0.7m.
Acquisition of DGP
Formed in 1972 and based in Manchester, DGP is 76% owned by its directors. It
has further offices at Sellafield, Dounreay and Warrington. DGP now employs 180
people with particular expertise in the nuclear, petrochemical, pharmaceutical,
water and waste management sectors. Its major projects include supporting
Bechtel on the design of a multi-billion pound new oil refinery for Capital
Reliance Group, acting as a Framework Consultant for the £3.6bn upgrade of the
Home Office Prisons Estate and design consultant for two multi-billion pound
nuclear decommissioning projects, B38 (Wet Silos) and B41 (Dry Silos), at
Sellafield.
In the year ended 31 December 2005, DGP had revenues of £14.0m, underlying EBIT*
of £1.2m, operating margin* of 8.2% and profit before taxation of £0.8m. Net
assets were £1.8m at this date.
*Underlying EBIT and operating margin are stated after adding back non recurring
items of £0.3m.
Trading at DGP in the current financial year has been strong, with management
accounts for the ten months to 31 October 2006 showing revenues and profits
ahead of last year's full year performance and a secure order book of £12m.
Scott Wilson has agreed to pay an initial consideration of £12.1m for DGP,
satisfied by £8.6m in cash and £3.5m by the issue of 1,480,662 new Ordinary
Shares in Scott Wilson, on 6 December 2006. Further consideration of up to a
maximum of £2.5m will be payable on the basis of 8.1 times DGP's underlying EBIT
for the year ending 31 December 2006 in excess of an agreed benchmark. The
further consideration shall also be adjusted on a £1 for £1 basis in the event
that DGP's net asset value, excluding cash, is above or below £1.4m. DGP's
assets at completion include £0.5m of cash. The further consideration will be
payable in cash together with interest at 5% pa from completion on the actual
amount paid.
Following the Acquisitions
Taken together with the recent acquisitions of Ferguson Mcllveen and RPA,
today's acquisitions bring the annualised revenues added to the Group by
acquisition since flotation in March 2006 to approximately £52m.
The Group retains significant capacity to finance additional complementary
acquisitions and fund further internal growth. Pro-forma net debt following the
acquisitions is only £10m.
Application for New Ordinary Shares
Application will be made for the new Scott Wilson Ordinary Shares to be issued
at completion, which will rank pari passu in all respects with the existing
issued share capital, to be admitted to the Official List and to the London
Stock Exchange's market for listed securities. It is expected that admission
will become effective and dealings in the new Ordinary Shares will commence on
12 December 2006.
- Ends -
Notes to Editors:
Scott Wilson is a leading international consultancy offering integrated services
for civil and structural engineering projects, transportation, environmental
studies and institutional development. It was ranked as the ninth largest
UK-owned engineering consultant by fee income for the calendar year 2005 in the
New Civil Engineer 2006 annual Survey.
The Group earned approximately 67 per cent of its revenue over the three years
to 30 April 2006 in the UK and approximately 33 per cent overseas. The Group has
an existing network of international offices controlled through six regional
centres in Warsaw, Johannesburg, Dubai, Delhi, Bangkok and Shanghai/Hong Kong.
Scott Wilson has strong relationships with national governments,
non-governmental agencies, multinational companies and supranational funding
bodies. In the financial year ended 30 April 2006, 30 of the Company's clients
were billed over £1m and the top 50 of the Group's clients accounted for
aggregate fees of some £100m.
Important clients and partners include Network Rail, the Highways Agency,
Balfour Beatty, Alfred McAlpine, Cross London Rail Links, English Partnerships,
Defence Estates, tie (transport initiatives Edinburgh), Southern Water, English,
Costain, London Underground and the Roads Service Northern Ireland.
Notable projects on which Scott Wilson has worked in the last year include
London Crossrail, Bangkok Airport, Manchester Airport, Spinnaker Tower, the UK
West Coast Rail Route Modernisation, AsiaWorld Expo, Victoria Station and
Edinburgh Tram.
This information is provided by RNS
The company news service from the London Stock Exchange