AMEC plc ("AMEC") Sale of AMEC SPIE
22 May 2006
On 24 November 2005, the board of AMEC ("the Board") announced its decision to initiate a sale of AMEC SPIE, to allow it to participate in the accelerating consolidation in its sector and to release resources to promote growth in AMEC's remaining services and investments activities.
AMEC and PAI partners ("PAI") announce that, subject to consultation with AMEC SPIE's Workers' Councils, they have agreed terms for the sale of AMEC SPIE to a new company controlled by funds managed by PAI for an equity value of approximately €1,040 million (£707 million) (the "Transaction"). The Transaction is expected to close around the middle of the third quarter of this year, generating an exceptional profit on disposal expected to be no less than £220 million.
AMEC SPIE provides electrical engineering, communications services and specialist activities in the energy and rail industries, predominantly in France. It has approximately 23,000 employees and operates from approximately 380 European locations. In the year ended 31 December 2005, AMEC SPIE generated revenues of £1,755 million and profit before interest, tax and intangible amortisation of £49.7 million.
Upon completion of the Transaction Jean Monville, Chairman of AMEC SPIE, and a Director of AMEC, will resign from the Board to concentrate on running SPIE under its new owners.
Use of proceeds
The net cash proceeds from the sale of AMEC SPIE of approximately €1,000 million (after adjusting for certain inter-company transactions) will be used initially to reduce debt and AMEC expects to be in a net cash position immediately following completion. AMEC continues to work on the separation of its continuing operations into two entities and will provide a further update on or before the publication of AMEC's interim results for the six months ending 30 June 2006, which is expected to be on 31 August 2006.
In accordance with the requirements of French Law, AMEC SPIE management will now undertake the process of consultation with AMEC SPIE's Workers' Councils.
Once this consultation process is completed, the Transaction will then be conditional on, amongst other things, the approval of AMEC Shareholders ("Shareholders"), which will be sought at an Extraordinary General Meeting, and the fulfilment of certain anti-trust regulatory clearances. A Circular containing details of the Transaction and notice of an Extraordinary General Meeting will be dispatched to Shareholders in due course.
AMEC chief executive, Sir Peter Mason, said:
"We are extremely pleased to announce this important first step in our strategic restructuring."
"We are delighted to have secured a timely transaction at a very good price and with a shareholder who will continue to support SPIE's plans to invest in and develop the business."
PAI senior partner, Bertrand Meunier, said:
"We are very pleased to have agreed on the terms of the acquisition of AMEC SPIE, a very well positioned company with a strong company spirit, an excellent business model and an outstanding management team. We consider that the company has excellent growth prospects and is a strong platform for acquisitions."
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Analysts and investors:
Sir Peter Mason KBE, Chief Executive
Stuart Siddall, Finance Director
Juliet Sychrava, Director of Corporate Communications
Charles Reynolds, Head of Media Relations
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