Acquisition

23 Mar 2007 09:15

Goodwin PLC23 March 2007 Goodwin PLC ("Goodwin" or the "Company") 23 March 2007 ACQUISITION OF NOREVA GmbH Goodwin, the mechanical and refractory engineering group, announces theacquisition of 75% of the share capital of Noreva GmbH ("Noreva"), amanufacturer of non return nozzle check valves located in Monchengladbach,Germany for an initial consideration of £2.8 million in cash. In the year to 31 December 2006 Noreva generated turnover of Eur 7.3 million (£5 million), profit before tax of Eur 0.42 million (£0.288 million) and has gross assets of Eur 4.3 million (£2.9 million) audited. The remaining 25% share interest, which is owned equally by the two currentManaging Directors of Noreva, Messrs R. Kurzenberg and M. Sattelberg (the"Managing Directors"), who are to continue to serve Noreva in their presentcapacity following the acquisition, is subject to put options exercisable by the Managing Directors no sooner than 5 years, and a call option exercisable byGoodwin PLC no earlier than 12 years, from the date of completion of theacquisition. The initial consideration is £2.8 million in cash, together with £0.6 millionpayable to Noreva (i.e. funds retained within the Goodwin group) for a perpetualtechnology licence. A deferred consideration of an additional £1.0 million willbe paid in two instalments, payable after three and five years after completion,respectively. The consideration in case of the exercise of the put and/or calloption will be either £1.0 million for the remaining 25 % of the Novera sharesor is to be calculated based on 10 times annual average pre-tax profit of Noreva for three years prior to the exercise of the option, or a combination of both calculation methods, depending on, inter alia, the term of service of therespective Managing Director. The Company believes that Noreva is a complementary business and anticipatessignificant value being created from the excellent synergy in the marketing andproduction capacity opportunities between Noreva and Goodwin's UK basedsubsidiaries Goodwin International Ltd and Goodwin Steel Castings Ltd (the"Goodwin Companies"). The Goodwin Companies manufacture and supply dual platenon-return check valves for the oil and gas industry worldwide, whereas Norevasupplies a complementary but more costly and faster-acting nozzle check valve to applications requiring less backflow and pressure surge. Noreva and the Goodwin Companies will continue to benefit from each others'technology and marketing resources, which are also complementary. Financing fromGoodwin will enable Noreva to extend its facility in Monchengladbach and anagreed cooperation in the area of distribution will enable each company toreduce lead times and provide a faster service to their customers and achieveincreased sales. The acquisition of Noreva will enable the Goodwin Companies and Noreva tofurther strengthen their relative market positions through the ability to offercomplete check valve solutions to their principal markets in the hydrocarbon,processing and water industries. Francis Gaffney, Director and General Manager of Goodwin International Ltd anda main board director of Goodwin PLC, will become a Managing Director of Noreva,together with the existing Managing Directors. Enquiries: John GoodwinTel: +44 1782 220000Goodwin PLC END This information is provided by RNS The company news service from the London Stock Exchange