Shearwater Regulatory News (SWG)

7 Dec 2006 07:03

Scott Wilson Group plc07 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 internationalconsultancy offering integrated professional services in the transportation,property, environmental and natural resources sectors, today announces thecompletion of the acquisitions of Cameron Taylor Group Limited ("CameronTaylor") and DGP International Limited ("DGP") for a maximum aggregateconsideration 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 Wilsonfloated earlier this year. Each has broadened the Group's presence in attractivesegments in keeping with the stated strategy of the Group. The Group retainssignificant capacity to finance both acquisitions and continued organic growth. Commenting on today's announcement, Geoff French, Executive Chairman of ScottWilson, said: "At the time of our flotation, the Board set out a clear strategy for achievingsustained growth, both organic and by acquisition, in revenue, margins andshareholder returns by building on the Group's position as one of the leadinginternational engineering consultancies. Today's announcement highlights furthersignificant progress in delivering complementary acquisitive growth to theGroup." "We are delighted to have made these high quality and strategically importantacquisitions. Both businesses bring expanded geographical coverage and sectoralexpertise. We look forward to realising operating synergies as we integratethese businesses into our existing divisions." For further information please contact: Scott Wilson Group plc www.scottwilson.comGeoff French, Chairman 01256 310 200Stephen Kimmett, Finance Director Smithfield 020 7360 4900Reg Hoare / Katie Hunt 07831 406117 / 07884 494112 Brewin Dolphin Securities 0131 529 0272Sandy Fraser Print resolution images are available for the media to view and download from www.vismedia.co.uk Reasons For and Benefits of the Acquisitions Both Cameron Taylor and DGP are highly regarded businesses experiencing stronggrowth with a clear sector focus, attractive operating margins and strongmanagement teams who are remaining after acquisition. Cameron Taylor substantially increases Scott Wilson's capability in the UKproperty sector, with annualised sector revenues of approximately £54m whencombined with our existing businesses, making Scott Wilson a top 10 rankedconsultancy in this sector. John Horgan, currently chief executive of CameronTaylor, will chair Scott Wilson's Property Sector Board, which will co-ordinatethe Group's activities within the sector across all of its operating Divisions. DGP will bring new skills within the nuclear, petrochemical and pharmaceuticalsectors and strengthens the Group's market presence in the North West of Englandand within the water and waste management sectors. The Directors anticipate that the acquisitions will enable the enlarged ScottWilson Group to benefit from a significantly improved market profile with awider client base, enhanced complementary skills and additional opportunities toundertake 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 reputationand market presence within the UK property sector. It provides a broad range ofconsulting engineering services from 10 UK offices, employing 330 staff. Current flagship projects include Great Western Quarter in West London, adiverse development for Barratt, designs for sustainable tri-generation plantsfor Tesco, new offices for The Crown Estate on Regent Street and Rio Tinto plcon St James's Square, the University of Art and Design which is part of theregeneration of Kings Cross with Argent, the new Planetarium at the RoyalGreenwich Observatory and conservation projects at both Cambridge and OxfordUniversities. 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 resultsof 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 withdouble digit revenue growth, a continued improvement in operating margin and asecure forward order book of approximately £21m. The Directors anticipate thatthis will be reflected in a significant uplift in both revenue and operatingprofit in the current financial year. Consideration paid upon completion on 7 December 2006 was £10.8m in cash andloan notes and £3.5m by the issue of 1,499,808 new Ordinary Shares in ScottWilson to shareholders in Cameron Taylor. Further consideration of £1.2m will bepayable in 12 months from completion to shareholders of Cameron Taylor, to besatisfied entirely by the issue of additional Scott Wilson Ordinary Sharessubject 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. Ithas further offices at Sellafield, Dounreay and Warrington. DGP now employs 180people with particular expertise in the nuclear, petrochemical, pharmaceutical,water and waste management sectors. Its major projects include supportingBechtel on the design of a multi-billion pound new oil refinery for CapitalReliance Group, acting as a Framework Consultant for the £3.6bn upgrade of theHome Office Prisons Estate and design consultant for two multi-billion poundnuclear decommissioning projects, B38 (Wet Silos) and B41 (Dry Silos), atSellafield. 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. Netassets were £1.8m at this date. *Underlying EBIT and operating margin are stated after adding back non recurringitems of £0.3m. Trading at DGP in the current financial year has been strong, with managementaccounts for the ten months to 31 October 2006 showing revenues and profitsahead 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 OrdinaryShares in Scott Wilson, on 6 December 2006. Further consideration of up to amaximum of £2.5m will be payable on the basis of 8.1 times DGP's underlying EBITfor the year ending 31 December 2006 in excess of an agreed benchmark. Thefurther consideration shall also be adjusted on a £1 for £1 basis in the eventthat DGP's net asset value, excluding cash, is above or below £1.4m. DGP'sassets at completion include £0.5m of cash. The further consideration will bepayable in cash together with interest at 5% pa from completion on the actualamount 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 byacquisition since flotation in March 2006 to approximately £52m. The Group retains significant capacity to finance additional complementaryacquisitions and fund further internal growth. Pro-forma net debt following theacquisitions is only £10m. Application for New Ordinary Shares Application will be made for the new Scott Wilson Ordinary Shares to be issuedat completion, which will rank pari passu in all respects with the existingissued share capital, to be admitted to the Official List and to the LondonStock Exchange's market for listed securities. It is expected that admissionwill become effective and dealings in the new Ordinary Shares will commence on12 December 2006. - Ends - Notes to Editors: Scott Wilson is a leading international consultancy offering integrated servicesfor civil and structural engineering projects, transportation, environmentalstudies and institutional development. It was ranked as the ninth largestUK-owned engineering consultant by fee income for the calendar year 2005 in theNew Civil Engineer 2006 annual Survey. The Group earned approximately 67 per cent of its revenue over the three yearsto 30 April 2006 in the UK and approximately 33 per cent overseas. The Group hasan existing network of international offices controlled through six regionalcentres 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 fundingbodies. In the financial year ended 30 April 2006, 30 of the Company's clientswere billed over £1m and the top 50 of the Group's clients accounted foraggregate 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 includeLondon Crossrail, Bangkok Airport, Manchester Airport, Spinnaker Tower, the UKWest Coast Rail Route Modernisation, AsiaWorld Expo, Victoria Station andEdinburgh Tram. This information is provided by RNS The company news service from the London Stock Exchange