WTM.L Regulatory News (WTM)

4 Apr 2007 07:01

Waterman Group PLC04 April 2007 Waterman Group plc ("Waterman Group" or the "Company") Proposed acquisition of Boreham Consulting Engineers Limited ("Boreham") Waterman Group announces that it has entered into a conditional agreement toacquire Boreham, a consultancy specialising in transport planning, developmentcontrol and transport studies, traffic engineering and infrastructure designconsultancy services, for a maximum consideration of £9.64 million to besatisfied in cash, ordinary shares and loan notes. Of this, £4.94 million is dueat completion whilst the deferred consideration of up to £4.7 million becomespayable post completion conditional on satisfying certain performance targetsand conditions. Further details of this are set out below. In view of its size,completion of the acquisition is conditional, inter alia, on the approval of theCompany's shareholders. Boreham was founded in 1984. Its principal business is working within privatesector organisations on major commercial, leisure, retail and residentialdevelopment schemes. It also provides support and advice on strategic transportschemes, traffic management, infrastructure design and public realm schemes tolocal government and public bodies. Boreham operates from offices in the UK andIreland and has its head office in Brentwood, Essex. Boreham also provides strategic advice on transport issues affecting thedevelopment industry and professional advice to assist in the development ofnational and local policies on behalf of leading developers, retailers andhousebuilders. Boreham specialises in providing expert witnesses at UnitaryDevelopment Plan reviews, Planning Inquiries and hearings. Advice provided by Boreham on transport and traffic issues associated with newretail developments ranges from feasibility through scheme development todetailed transport assessments ("TA"s) and Travel Plans in support of planningapplications. Consideration of large mixed use schemes involves complex andextensive modelling techniques including significant highway network and travelbehaviour analysis. Boreham has a long and successful track record of promotingsustainable transport solutions. Boreham's revenue for the year to 31 March 2006 was £9.9 million and pre-taxprofit for this period was £2.2 million. Boreham's net assets as at 31 March2006 were £5.3 million and its gross assets were £6.8 million. Waterman's strategic objective is to strengthen its position as one of the UK'sleading multi-disciplinary engineering and environmental consultancies. Theacquisition of Boreham (the "Acquisition") provides an opportunity for theWaterman Group to strengthen its capability in the transport planning andtraffic engineering sector and for the anticipated increased cash flow to beutilised in pursuing the same successful strategy that has been adopted over thelast few years. The Waterman Board also believes that Boreham's specialismallows the business to achieve relatively high margins within the engineeringconsultancy field and therefore a good strategic fit with the existing WatermanGroup. The acquisition of Boreham will bring a number of benefits and opportunities toWaterman at an opportune time: • The Acquisition will create a major traffic consultancy capable, the Directors believe, of competing with the prominent players in the market; • Boreham is an established traffic business with specialist skilled staff which will enhance the existing range of services offered by the Waterman Group; • Boreham has a strong balance sheet and trading record; • Boreham has long term relationships with major clients; and • There is the potential to grow Boreham's regional offices. The Acquisition is expected to deliver significant benefits to shareholders ofthe Company over the medium term, derived, in part, from the operationalsynergies available by combining the two businesses, which to a large extenthave different skills, as well as different regional and sectoral coverage andtherefore complement each other well. The Waterman Board expects that thesynergies from combining Waterman and Boreham will enhance earnings from 2007and beyond. At its annual general meeting in December 2006, Waterman reported a strong orderbook and organic revenue growth in excess of 10 per cent. thanks to buoyanttrading conditions in all its sectors (environmental, structural, buildingservices, civils) and markets (UK, Ireland, Belgium, Russia, Poland, Dubai,Australia and China). The unaudited interim results of the Waterman Group forthe six months ended 31 December 2006 were recently announced and also reflectedstrong trading. In the subsequent period the Waterman Group has continued totrade well and in line with budget. Boreham's current profitability is in linewith expectations and margins continue to be maintained. The Directors ofWaterman view Boreham's future prospects with confidence given Boreham's currentperformance and the buoyancy of its existing markets. Under the terms of the Acquisition, the Company has agreed to acquire the entireissued share capital of Boreham, including its wholly-owned dormant subsidiary,Alan Boreham Associates Limited. The initial consideration of £4.94 million willbe payable in cash on completion to the vendors. The initial consideration willbe financed through new borrowings. In addition, further deferred considerationwill be payable following completion adjustable up to a maximum of £1.4 million(determined in relation to the net asset value of Boreham on completion), and upto a maximum sum of £3.3 million (determined in relation to whether Borehammeets certain performance targets in the three years following Completion).Completion of the acquisition is conditional upon Waterman shareholder approvalat an Extraordinary General Meeting expected to be held on 20 April 2007. Commenting on the acquisition, Bob Campbell, Managing Director said: "The key features of Waterman Group's strategy are to diversify further therange of services offered to clients, to cross sell its range of servicesthroughout its client base and to expand its regional areas of operations.Boreham scores highly in each of these areas and we are delighted to welcomethis high quality, specialist transport and traffic consultancy team to theWaterman Group." -ends- Date: 4 April 2007For further information contact: Waterman Group plc cityPROFILEBob Campbell, Managing Director Simon CourtenayGraham Hiscocks, Finance Director William Attwell020-7928-7888 020-7448-3244web: www.waterman-group.co.uk This information is provided by RNS The company news service from the London Stock Exchange