24 Nov 2010 07:00
24 November 2010
INTERSERVE EXPANDS EQUIPMENT SERVICES OPERATIONS INTO USA
Interserve, the international services, maintenance and building group, is pleased to announce that its Equipment Services division has reached an agreement to acquire the heavy forming and shoring assets, including related distribution centres, of CMC Construction Services ("CMC"), a division of CMC Steel Fabrications, Inc., which is a subsidiary of Commercial Metals Company. The acquisition enables Interserve to expand its geographical footprint into the world's largest construction market.
A total cash consideration of approximately $35 million has been paid for the assets, which represents a significant discount to their replacement cost. The payment has been made from the Group's existing cash resources. At 30 June 2010 the Group had net debt of £53.1 million and committed facilities in place of £ 250 million, expiring in late 2013. Hence the Group will retain a strong financial position following the acquisition.
The acquisition is the next step in Interserve's strategy to expand its international growth with a fuller service offering, a major part of its platform for long-term growth. CMC has been one of the leading resellers of formwork and shoring solutions in the USA, primarily serving the civil engineering markets in Texas, Colorado and California, and has been a customer of Equipment Services since 2004. The acquisition represents an attractive opportunity to gain access to the largest construction market in the world via an existing client base and an established sales force, branch and distribution network.
In addition to acquiring the heavy forming and shoring solutions of the business from CMC, Interserve has re-employed the majority of the management and staff associated with this business activity. The business will be based in Denver and will operate from distribution centres in Houston, Dallas, Denver and Los Angeles.
Revenues generated from the assets, people and facilities acquired were approximately $18 million over the last twelve months. The transaction is projected to be marginally accretive to headline EPS in the first full year of ownership, 2011.
Adrian Ringrose, Chief Executive of Interserve, commented, "This acquisition expands the Group's international footprint and provides an attractive growth opportunity for our Equipment Services division at a price that we believe represents excellent value for shareholders. We are excited by the opportunity to leverage our expertise and experience within Equipment Services to generate significant growth in the US over the coming years."
Adrian Ringrose and Steven Dance, Managing Director of Equipment Services, will host a conference call for analysts and investors at 8:30am on 24 November; for details please contact Maitland on 020 7379 5151. Slides to accompany the conference call will be available to download from the Interserve website at www.interserve.com/investors from 8:00am.
- Ends -
For further information please contact:
Adrian Ringrose, Chief Executive 0118 932 0123 Matt Jones, Head of Investor Relations 0118 960 2280 Elizabeth Morley / Tom Eckersley, Maitland 020 7379 5151
About Interserve
Interserve's vision is to be the Trusted Partner of all our stakeholders. We are one of the world's foremost support services and construction companies, operating in the public and private sectors in the UK and internationally. We offer advice, design, construction and facilities management services for society's infrastructure and provide a range of plant and equipment in specialist fields. Interserve is based in the UK. It has revenue of £1.9 billion and a workforce of 50,000 people worldwide. Website: www.interserve.com.
vendor