Sulzer makes recommended cash offer to acquire Dowding & Mills - strengthening its service busines |
02.06.2010
| from Sulzer AG
02.06.2010, Sulzer and the board of Castle Support Services plc, the sole owner of Dowding & Mills, have agreed the terms of a recommended cash offer by Sulzer (UK) Holdings Ltd for Castle Support Services plc, for a total of approximately GBP 127.5 million (CHF 217 million). Sulzer (UK) Holdings Ltd has received irrevocable undertakings to accept the offer in respect of shares representing 94.09% of Castle Support Services plc. With the proposed acquisition, Sulzer intends to strengthen its service business. Dowding & Mills is a leading repair and maintenance service provider for generators and motors with annual sales of GBP 125.5 million (CHF 213 million). The electromechanical activities of Dowding & Mills will expand Sulzer’s technical competences and complement the current activities of Sulzer Turbo Services. The intended acquisition will create a leading independent provider of maintenance and repair services for turbomachinery, generators and motors with potential for further geographic expansion. Sulzer will maintain its strong financial position, allowing for further external growth.
Sulzer and the board of Castle Support Services plc have agreed the terms of a recommended cash offer by Sulzer (UK) Holdings Ltd for the entire ordinary share capital of Castle Support Services plc, the sole owner of Dowding & Mills. The offer will comprise 108 pence in cash for each Castle Support Services plc share, valuing the entire existing issued ordinary share capital of Castle Support Services plc at approximately GBP 127.5 million (CHF 217 million).
Founded in 1919, Dowding & Mills is one of the largest independent repair and maintenance providers for generators, motors and associated equipment. With its quality repair and remanufacturing service that recycles existing materials and components, the company provides a fast alternative to replacement of motors and generators. Dowding & Mills generated annual sales of GBP 125.5 million (CHF 213 million) in the twelve months ended on June 30, 2009 and employs approximately 1400 people in the UK, USA, Australia and UAE. Some activities of Dowding &Mills also trade under the names Boothams Engineers, EMS, and Dickson Dowding & Mills.
The intended acquisition of the service business Dowding & Mills will increase Sulzer’s customer support service sales, with an associated increase in the proportion of sales generated with service activities. The combination of Dowding & Mills with Sulzer Turbo Services is expected to improve the growth prospects of the combined businesses. A strengthening of service business is one of the five areas of focus of Sulzer. Customer support businesses are generally less cyclical and therefore have more stable sales, earnings and cash contributions.
The intended acquisition of Dowding & Mills will expand Sulzer’s technical competences into the near adjacent electromechanical service market and complements Sulzer Turbo Services’ capabilities in mechanical services for turbomachinery. It will create a leading independent provider of maintenance and repair services for turbomachinery, generators and motors. The broader service offering will allow further strengthening of the relationship with the shared customer base as well as with potential new customers.
The intended acquisition will improve the foundation for future geographic expansion. Dowding & Mills broadens the geographic presence of Sulzer Turbo Services. Sulzer’s strength in technology transfer will allow an accelerated development of the international presence beyond the current locations. The electromechanical activities offer a potential to expand the service offering with phased investments in new locations in emerging markets.
The offer to acquire Dowding & Mills confirms Sulzer’s commitment to external growth. The intended acquisition reflects Sulzer’s strategy to complement and strengthen its current portfolio. It is also in line with its acquisition discipline based on the clear criteria of strategic fit, value creation and integration. The acquisition will be funded using existing cash. Sulzer will maintain its sound financial position, allowing further external growth.
The directors of Castle Support Services plcconsider the terms of the offer to be fair and reasonable and unanimously recommend that the Castle Support Services plcshareholders accept the offer. In aggregate, and including the shareholdings of the Castle Support Services plcdirectors, Sulzer (UK) Holdings Ltd has received irrevocable undertakings to accept the offer in respect of shares representing 94.09% of Castle Support Services plc.
If Sulzer receives acceptances of 90% or more of the Castle Support Services plcshares, assuming all other conditions of the offer have been satisfied or waived, Sulzer intends to exercise the rights for compulsory acquisition of the remaining Castle Support Services plcshares on the same terms as the offer.
Sulzer Turbo Services is an independent provider of repair and maintenance services for thermal turbomachinery and other rotating equipment. The division also manufactures and sells replacement parts for gas turbines, steam turbines and compressors. Sulzer Turbo Services’ customers are in the oil and gas, hydrocarbon processing, power generation and other industrial markets. Sulzer Turbo Services achieved sales of CHF 291 million in 2009 with around 1200 employees.
Contact
Sulzer AG Verena Gölkel Phone 052 262 26 82 Fax 052 262 00 25 news@sulzer.com
--- END press release Sulzer makes recommended cash offer to acquire Dowding & Mills - strengthening its service busines ---
Founded in 1919, Dowding & Mills is one of the largest independent repair and maintenance providers for generators, motors and associated equipment. With its quality repair and remanufacturing service that recycles existing materials and components, the company provides a fast alternative to replacement of motors and generators. Dowding & Mills generated annual sales of GBP 125.5 million (CHF 213 million) in the twelve months ended on June 30, 2009 and employs approximately 1400 people in the UK, USA, Australia and UAE. Some activities of Dowding &Mills also trade under the names Boothams Engineers, EMS, and Dickson Dowding & Mills.
The intended acquisition of the service business Dowding & Mills will increase Sulzer’s customer support service sales, with an associated increase in the proportion of sales generated with service activities. The combination of Dowding & Mills with Sulzer Turbo Services is expected to improve the growth prospects of the combined businesses. A strengthening of service business is one of the five areas of focus of Sulzer. Customer support businesses are generally less cyclical and therefore have more stable sales, earnings and cash contributions.
The intended acquisition of Dowding & Mills will expand Sulzer’s technical competences into the near adjacent electromechanical service market and complements Sulzer Turbo Services’ capabilities in mechanical services for turbomachinery. It will create a leading independent provider of maintenance and repair services for turbomachinery, generators and motors. The broader service offering will allow further strengthening of the relationship with the shared customer base as well as with potential new customers.
The intended acquisition will improve the foundation for future geographic expansion. Dowding & Mills broadens the geographic presence of Sulzer Turbo Services. Sulzer’s strength in technology transfer will allow an accelerated development of the international presence beyond the current locations. The electromechanical activities offer a potential to expand the service offering with phased investments in new locations in emerging markets.
The offer to acquire Dowding & Mills confirms Sulzer’s commitment to external growth. The intended acquisition reflects Sulzer’s strategy to complement and strengthen its current portfolio. It is also in line with its acquisition discipline based on the clear criteria of strategic fit, value creation and integration. The acquisition will be funded using existing cash. Sulzer will maintain its sound financial position, allowing further external growth.
The directors of Castle Support Services plcconsider the terms of the offer to be fair and reasonable and unanimously recommend that the Castle Support Services plcshareholders accept the offer. In aggregate, and including the shareholdings of the Castle Support Services plcdirectors, Sulzer (UK) Holdings Ltd has received irrevocable undertakings to accept the offer in respect of shares representing 94.09% of Castle Support Services plc.
If Sulzer receives acceptances of 90% or more of the Castle Support Services plcshares, assuming all other conditions of the offer have been satisfied or waived, Sulzer intends to exercise the rights for compulsory acquisition of the remaining Castle Support Services plcshares on the same terms as the offer.
Sulzer Turbo Services is an independent provider of repair and maintenance services for thermal turbomachinery and other rotating equipment. The division also manufactures and sells replacement parts for gas turbines, steam turbines and compressors. Sulzer Turbo Services’ customers are in the oil and gas, hydrocarbon processing, power generation and other industrial markets. Sulzer Turbo Services achieved sales of CHF 291 million in 2009 with around 1200 employees.
Contact
Sulzer AG Verena Gölkel Phone 052 262 26 82 Fax 052 262 00 25 news@sulzer.com
--- END press release Sulzer makes recommended cash offer to acquire Dowding & Mills - strengthening its service busines ---
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