Proposed sale AEA Technology Rail companies

Proposed sale of the Portfolio Companies and the Rail Business to Vision Capital

Oxfordshire, United Kingdom – AEA Technology plc (“the Company” or “AEA”) has entered into a conditional agreement to sell a portfolio of companies and the Rail Business together (the “Disposal Portfolio”) on a debt free basis, to companies advised by Vision Capital Limited (“Vision Capital” or the “Purchasers”). Going forward, AEA will become focused solely on its growing Environment Business.

Proposed sale of the Portfolio Companies and the Rail Business to Vision Capital
Highlights

  • AEA Technology plc (“the Company” or “AEA”) has entered into a conditional agreement to sell a portfolio of companies and the Rail Business together (the “Disposal Portfolio”) on a debt free basis, to companies advised by Vision Capital Limited (“Vision Capital” or the “Purchasers”). Going forward, AEA will become focused solely on its growing Environment Business.
  • The Disposal Portfolio consists of the Rail Business, the Rail Companies, Kinectrics, ESI and WMT.
  • The consideration for the sale is up to £58.3 million. In addition, the Purchasers will assume £18.1 million of Group balance sheet liabilities as at 31 March 2006 in respect of pension and post-retirement employee benefit obligations within the Disposal Portfolio, to give an overall potential disposal value to AEA of £76.4 million.
  • Of the £58.3 million consideration, £12.0 million is deferred payable depending on future performance of the Rail Business and the Rail Companies. The consideration is also subject to an expected adjustment of £5.4 million in respect of cash, debt and working capital balances in the Disposal Portfolio at completion.
  • Net consideration is therefore £40.9 million of which £5.0 million is payable 6 months after completion. After the deduction of tax and transaction costs of approximately £7.6 million, the Directors intend to use the expected net proceeds of £33.3 million to reduce the Company’s bank debt by £21.2 million, pay £10.0 million into the AEA Technology Pension Scheme, and use £2.1 million for redundancy payments in overhead areas of the continuing group.

Bernard Bulkin, Chairman of AEA Technology plc said,
‘The Board believes this deal is in the best interest of our shareholders. A growing, single mission, business focused on Environment, where AEA Technology plc has a leadership position, offers excellent prospects for the Company. Management has thus completed the restructuring phase; as a consequence both debt levels and the pension deficit have been significantly reduced. The company now has a solid financial base from which to build a future.’

Andrew McCree, Chief Executive of AEA Technology plc said,
‘We are now able to pursue more actively the exciting opportunities in the Environment market. Growing international concern about climate change and energy security is expanding the marketplace internationally, which is good for AEA as we are a leading advisor to government in both the UK and the EU. The business has made a good start to the financial year.’

Details of the proposed sale of the Disposal Portfolio

Auteur: Redactie Infrasite

Bron: AEA Technology plc