Business
Acquisition of Esorfranki Geotechnical
Acquisition of Esorfranki Geotechnical.
About this update from Keller Group Plc
[{"type":"text","content":"\n \nRNS Number : 0696Q Keller Group PLC 09 October 2013 \n \n\nFor immediate release Wednesday, 9 October 2013\n \nKeller Group plc\n(\"Keller\" or \"the Group\")\n \nAcquisition of Esorfranki Geotechnical, South Africa\n \n \nKeller (LSE: KLR), the international ground engineering specialist, announces that it has agreed to purchase the Geotechnical Division of the Johannesburg-listed civil engineering and construction company Esorfranki Limited (JSE: ESR) for an initial consideration of R500m (£31m).\n \nEsorfranki Geotechnical is the largest ground engineering business in South Africa, offering design and build services to the mining, civil engineering and construction industries, and has a strong track record of executing projects in other Sub-Saharan African countries. In the year ended 28 February 2013, Esorfranki Geotechnical generated revenue of R788m (£49m), of which 46% was earned outside South Africa, and an underlying operating profit* of R53m (£3.3m). At 28 February 2013, the value of the gross assets to be acquired was R630m (£39m) and the business had net assets of R419m (£26m).\n \nIn addition to adding a market-leading business run by an experienced management team who will remain with the business, the acquisition will accelerate Keller's entry into selected sub-Saharan construction markets, where significant growth is expected over the medium to long term, fuelled by major infrastructure and resources-related projects. The business will form part of the Group's EMEA division.\n \nThe total consideration, to be paid in cash from Keller's existing facilities, will comprise an initial payment of R500m (£31m), on a debt and cash free basis, together with a maximum deferred consideration of R150m (£9.4m) dependent on the achievement of a certain level of profits over the three years following the acquisition. \n \nCompletion is expected by the end of November 2013 and is subject, inter alia, to approval by shareholders of Esor...