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Tue November 24 2020

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Keller buys South African geotech business

9 Oct 13 Keller has agreed to purchase the geotechnical division of civil engineering and construction company Esorfranki for an initial sum of R500m (£31m).

Esorfranki Geotechnical is the largest ground engineering business in South Africa, offering design and build services to the mining, civil engineering and construction industries. It also operates 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).

Keller chief executive Justin Atkinson said: "This important acquisition marks another milestone in our strategy of extending our global leadership by expansion into new, higher growth regions. The combination of Esorfranki Geotechnical's local knowledge and resources with Keller's scale, experience and broad range of techniques will make us ideally placed to undertake complex major projects requiring design expertise and multi-product solutions in a region where we expect the longer-term opportunities to be significant."

The 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.

Completion is expected by the end of next month.

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MPU

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