Worley Acquires Parsons E&C
|Friday, October 08, 2004
The acquisition price represents an historical EBITDA (earnings before interest tax depreciation and amortization) multiple of 6.9 times (year ended 31 December 2003) and is expected to be EPS (earnings per share) accretive (pre-amortization) in the first year.
Parsons E&C is a provider of engineering, procurement, project management and construction management services to the Oil & Gas, Refining, Petrochemicals and Chemicals and Power sectors globally. Parsons E&C currently has in excess of 5,400 personnel operating in 16 countries and operates in many regions where Worley either does not have a presence or is seeking further growth.
The combined group will be one of the select global companies with the capability to service large-scale resources projects and will have an increased participation in the power industry worldwide. Subject to shareholder approval at Worley's forthcoming annual general meeting, the merged group will be renamed "WorleyParsons".
Worley Chief Executive Officer, Mr John Grill, said the acquisition provides Worley with a unique opportunity to expand its technical capabilities and geographic presence, creating significant growth opportunities for both companies which would not previously have been achievable.
"The consolidation in the oil & gas industry globally is driving projects of greater and greater scale and creating a similar consolidation amongst service providers. It firmly positions us in the top five oil & gas service providers in the world and provides an excellent platform to extend our world class light metals capability," he said.
"This is the logical next step in our relationship with Parsons E&C, with whom we have worked closely as a joint venture partner. Parsons E&C represents the perfect partner for Worley, given the highly complementary nature of our operations in terms of both geographical locations and technical skills," Mr Grill added.
The existing operations of Parsons E&C will continue to operate predominantly under the stewardship of Mr. Bill Hall, Parsons E&C's existing Chairman and CEO, who has agreed to accept a position on the Worley Board. The senior executive team will be drawn from the two companies.
Mr Hall, said: "I am delighted to extend this relationship with Worley to create a leading global player in the hydrocarbons market. Clients of both organisations will benefit from the significantly broader and deeper resources at our disposal and the opportunity to cross-sell services through an increased network of offices.
"An integration team comprising senior representatives from both companies has already made significant headway in the process of bringing the two businesses together and identifying opportunities for future expansion," he said.
The combined group will have:
The acquisition is to be funded through a combination of new debt facilities and the issue of new ordinary shares, comprising an Institutional Placement and an Entitlement Offer, which are fully underwritten by UBS. Total proceeds from the Institutional Placement and the Entitlement Offer are expected to be approximately A$200 million.
The Entitlement Offer will comprise an Institutional Entitlement Offer and a Retail Entitlement Offer. The Institutional Entitlement Offer will be conducted in conjunction with the Institutional Placement through a two-day bookbuild process, after which Worley will determine the issue price for the New Shares (which will be the same for both the Institutional Entitlement Offer and the Retail Entitlement Offer). Shares issued under the Institutional Placement will not rank for the Entitlement Offer.
A trading halt in Worley shares has been granted by Australian Stock Exchange while the bookbuild is conducted. It is expected that trading in Worley shares will recommence on Monday, 11 October 2004.
The Retail Entitlement Offer is scheduled to open on Monday 18 October 2004 and is expected to close on Wednesday 3 November 2004, although these dates are subject to change. A prospectus containing the full details of the Entitlement Offer will be posted to shareholders.
Most Popular Articles
From the Career Center
Jobs that may interest you