Smiths Group to divest Artificial Lift business

RNS Number : 6464K

Smiths Group PLC

23 September 2016

 

 

News Release

London, 23 September 2016

For immediate release

Smiths Group divestment of its Artificial Lift business

Smiths Group plc ("Smiths Group" or the "Group") today announces that it has entered into an agreement to sell its Artificial Lift business ("Artificial Lift"), part of the John Crane division, to Endurance Lift Solutions, LLC. The total gross consideration payable at completion is $39.5m in cash subject to an adjustment based upon the working capital position at completion.

Artificial Lift is engaged in the sale of products and services, principally sucker rods for onshore upstream oil and gas customers in the United States and Romania.

For the year ended 31 July 2015, the business and assets subject to the transaction had combined revenues of $90.8m and an operating loss before certain non-recurring items of $1.8m.  The gross assets of the combined business at 31 July 2015 were $63.2m.

For the unaudited year ended 31 July 2016, the business and assets subject to the transaction had combined revenues of $53.4m and an operating loss before certain non-recurring items of $10.1m.  The gross assets of the combined business at 31 July 2016 were $32.1m.

The management team will transfer with the business. The transaction is subject to customary regulatory approvals and is expected to close by the end of the calendar year.

Andy Reynolds Smith, Chief Executive of Smiths Group, commented as follows:  "This disposal demonstrates our ongoing commitment to increasingly focus our portfolio on building technology differentiated leadership positions in our chosen markets. The capital released from this transaction will be reinvested in attractive growth opportunities, whilst allowing the Artificial Lift business to progress under different ownership."

PPHB, an independent investment banking firm focused on the energy services sector, acted as exclusive financial advisor to Smiths Group in the sale of Artificial Lift.

ENDS

Contact details

Investor enquiries

Andrew Lappin, Smiths Group

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Kirsty Law, Smiths Group

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Media enquiries

Andrew Lorenz, FTI Consulting

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Smiths is a global technology company listed on the London Stock Exchange (SMIN) and operates a sponsored level one ADR programme (SMGZY). A world leader in the practical application of technologies, Smiths Group delivers products and services for the threat & contraband detection, medical devices, energy and communications markets worldwide. Our products and services make the world safer, healthier and more productive. Smiths Group employs more than 23,000 people in over 50 countries. For more information visit www.smiths.com

Disclaimer

This announcement contains certain statements that are forward-looking statements. They appear in a number of places throughout this announcement and include statements regarding our intentions, beliefs or current expectations and those of our officers, directors and employees concerning, amongst other things, our results of operations, financial condition, liquidity, prospects, growth, strategies and the business we operate. By their nature, these statements involve uncertainty since future events and circumstances can cause results and developments to differ materially from those anticipated. The forward-looking statements reflect knowledge and information available at the date of preparation of this announcement and, unless otherwise required by applicable law, Smiths undertakes no obligation to update or revise these forward-looking statements. Nothing in this document should be construed as a profit forecast.

No statement in this announcement is intended to be a profit forecast and no statement in this announcement should be interpreted to mean that earnings per Smiths ordinary share for the current or future financial years would necessarily match or exceed the historical published earnings per Smiths ordinary share.  Prices and values of, and income from, shares may go down as well as up and an investor may not get back the amount invested.  It should be noted that past performance is no guide to future performance.  Persons needing advice should consult an independent financial adviser.  Any statement to the effect that the Acquisition is expected to be earnings enhancing for Smiths should not be interpreted to mean that earnings per Smiths ordinary share in the first full financial year following the Acquisition, nor in any subsequent period, will necessarily match or be greater than those for a preceding financial year.

 

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