Bureau Veritas has signed an agreement with Inspicios to acquire its subsidiary Inspectorate for £450 million ($663.6MM). The transaction is expected to be completed during 3Q 2010, upon clearance from the relevant competition authorities.
The acquisition of Inspectorate is a decisive step forward for Bureau Veritas, making it one of the world leaders in commodities testing and inspection. This acquisition gives a new dimension to the Group, doubling the size of its laboratory network (330 sites) and offering the largest range of services in the conformity assessment sector: Industry, Construction, Marine, Consumer Products, Commodities, Systems Certification, In-Service Inspection & Verification and Government Services. Following this acquisition, the Group will employ 46,000 people in more than 140 countries, with revenues of around €3 billion.
Frank Piedelièvre, Chairman and CEO of Bureau Veritas, stated, "This acquisition is a unique opportunity for Bureau Veritas. In addition to leadership positions in its seven businesses, Bureau Veritas now attains a critical size in the very promising commodities testing and inspection market, in which the Group will now become a key player. By integrating a company of Inspectorate's quality and reputation, we are extending our business portfolio and bolstering our international network in the US and most emerging economies. This is a major strategic move for the Group."
Neil Hopkins, CEO of Inspectorate, commented, "We are happy to join forces with a global leader and a reference within the industry. Bureau Veritas is the ideal partner for accelerating our development thanks to the strength of its network and its complementary technical expertise."
A NEW STAGE IN BUREAU VERITAS' LEADERSHIP STRATEGY
The acquisition of Inspectorate meets three strategic objectives for Bureau Veritas:
Bureau Veritas' experience and network will help to accelerate significantly Inspectorate's development, notably by extending Inspectorate's technical expertise throughout the Group's geographical network, by opening new laboratories in key regions, and by enlarging its service offering. In addition to these revenue synergies, synergies are expected from improved operating efficiency with the merger of the two organizations, notably through optimization of back-office functions, IT investments, procurement, and in offices and laboratories.
A POSITIVE FINANCIAL IMPACT FOR THE GROUP
The transaction, representing an acquisition price of £450 million, will be financed via existing and newly negotiated credit lines. Following the acquisition, Bureau Veritas’ net debt is set to represent around 2x EBITDA, well below the Group's banking covenants.
The operation will have an accretive impact on earnings from 2010 (full-year impact of about 3% in 2010 and 4% in 2011, excluding synergies). Given growth opportunities and margin improvement potential, the operation is expected to create significant value for Bureau Veritas' shareholders, the mid-term objective being to align Inspectorate's operating margins to those enjoyed by Bureau Veritas.
Most Popular Articles
From the Career Center
Jobs that may interest you