Bateman Engineering N.V. ("Bateman
Engineering or the “Company")
14 April 2008
Acquisition of the Delkor group of companies
Bateman Engineering is pleased to announce that it has entered into an agreement to acquire the Delkor ‘group’ of companies (“Delkor Group”) for a minimum cash consideration of USD 11.45 million. An initial payment of USD 5.3 million will be paid upon completion with further payments due on 30 September 2008 and 30 September 2009. The deferred payments are subject to adjustment based on the growth in the Delkor Group’s profit before tax during the financial periods to 30 June 2009 and are more fully described below. Bateman Engineering expects the transaction to complete shortly in all the relevant jurisdictions save China where completion is subject to regulatory approval.
The Delkor Group is a recognised leader in the supply of solid / liquid separation equipment with 30 years of design, engineering and supply into mineral and chemical processing applications. They have a wide range of equipment including horizontal vacuum belt filters, thickeners, screens and associated mineral processing equipment. With offices located in many key mining industry centres, the Delkor Group is able to supply products on a global basis. The addition of the Delkor Group will bring additional technologies, an international network of offices and a new set of clients to the Bateman Engineered Technologies (“BET”) division of the Bateman Group.
The Delkor Group includes six separate operating companies located in Australia, Canada, Chile, China, India and the UK which, prior to the transaction, were connected with certain common ownership and intellectual property. Pro-forma consolidated revenue for the Delkor Group was approximately USD 43 million for the 12 month period ended 30 June 2007 with profits before tax of approximately USD 4 million.
David Minson, currently a regional Managing Director of the largest division of the Delkor Group (Delkor Americas), has been appointed as CEO of the Delkor Group. David will report to Arnold Matthee, head of BET. The senior managers of the Delkor Group’s operating companies have all signed service agreements and are incentivised via the purchase agreement to remain with the Delkor Group on a long term basis.
Bateman Engineering expects the acquisition to be earnings enhancing in the first full year of ownership.
Deferred payments and terms
The deferred consideration payments will be subject to adjustment based on the rate of growth of the Delkor Group’s consolidated profit before tax for each of the financial years 30 June 2008 and 30 June 2009.
Should the Delkor Group recognise consolidated profit before tax of not more than USD 4 million for the financial years ending 30 June 2008 and 2009, the deferred payments due on 30 September 2008 and 2009 will equal USD 1.95 million and USD 4.2 million respectively for a total consideration of USD 11.45 million.
Should the Delkor Group recognise a 20% increase in consolidated profit before tax in each of the financial years ending 30 June 2008 and 2009, the deferred payments due on 30 September 2008 and 2009 will equal USD 6.1 million and USD 8.4 million respectively for a total consideration of USD 19.8 million.
The cash consideration is subject to a maximum cap of Euro 30 million (USD 47.5 million), which would be payable if the average annual growth of profit before tax exceeds 150% between 30 June 2007 and 30 June 2009.
Commenting on the acquisition, Dr. Sivi Gounden, CEO of Bateman Engineering said:
“The Delkor acquisition is a critical step toward our growth objectives. It provides a platform to immediately globalise our equipment business which, to date, was focused largely on the Southern African market. Delkor’s impressive margins and history of growth will immediately contribute to our financial results.“
Further commenting on the acquisition, David Minson said:
“We are very excited to be joining the Bateman group of companies and are pleased that we will be maintaining the integrity of the Delkor infrastructure to ensure continuing support to our loyal client base. With Bateman Engineering behind us, we hope to grow our business both in existing and new markets, whilst sustaining our core values of providing quality and innovation.“
14 April 2008
ENQUIRIES:
| Bateman Engineering |
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Dr. Sivi Gounden, CEO |
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+31 20 502 2370 |
Eddie Du Rand, Deputy CEO
Pieter Du Plessis, CFO |
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+31 20 502 2370
+41 55 451 9010 |
Dresdner Kleinwort |
|
|
Chris Treneman |
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+44 20 7623 8000 |
Alex Metherell |
|
+44 20 7623 8000 |
Andrew Hollins |
|
+44 20 7623 8000 |
College Hill |
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|
Nicholas Potter (Analysts) |
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+44 20 7457 2037 |
Adam Aljewicz |
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+44 20 7457 2029 |
Further information on the Delkor Group is available at http://www.delkorglobal.com
