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INTERTEK ACQUIRES MOODY FOR GBP450 MILLION
7 MARCH 2011
Summary of the Acquisition
Intertek Group plc ("Intertek" or the "Company"), a leading international provider of quality and safety services, announces that it has entered into a conditional agreement to acquire Moody International ("Moody") for a consideration of US$730 million (GBP450 million) on a cash-free and debt-free basis (the "Acquisition").
Moody is a leading worldwide provider of quality and safety services to the global energy industry. It also provides systems certification services to the manufacturing, construction and service markets. Moody is headquartered in Haywards Heath, UK, and employs approximately 2,500 people in over 80 offices and 60 countries. Moody is currently owned by companies controlled by Investcorp Securities Limited, and the management of Moody. Intertek is funding the Acquisition entirely in cash from new and available debt facilities.
Background to and reasons for the Acquisition:
Moody will join the Industrial Services division of Intertek. Together Intertek and Moody will have a leading technical services platform in Intertek's sector of the global energy market.
The Acquisition offers significant benefits for and opportunities to the Company, including:
_ Becoming a leading provider of quality & safety services for the global energy market
_ Creating a global platform for the provision of Industry Services, extending existing EU and North American positions
_ Extending the depth of the service portfolio for energy assets, processes and products
_ Becoming a global player in systems certification
_ Increasing revenue diversification for Intertek
_ Pre-tax cost synergies rising to approximately GBP 6 million are expected to be achieved by the third full year of ownership
Further information on Moody and the transaction:
The value of Moody's gross assets which are the subject of the Acquisition was US$330 million as at 31 December 2009, the latest date at which audited consolidated accounts are available for Moody. For the year ended 31 December 2009 Moody generated revenue of US$457 million, operating profit before the deduction of goodwill amortisation ("EBITA") of US$66 million and profit before tax of US$49 million. Moody's unaudited management accounts for the year ended 31 December 2010 show revenue of US$476 million and EBITA of US$54 million. The consideration of approximately US$730 million represents a multiple of 11.1x 2009 EBITA and 13.4x 2010 EBITA.
The Acquisition, excluding reorganisation and associated costs, is expected to be earnings enhancing for the Company in the current financial year and is expected to be materially earnings enhancing next year.
The Acquisition is conditional upon competition clearances in certain countries. It is anticipated that the necessary clearances will be obtained by the end of April and the transaction will complete immediately after.
Brendan Connolly, Moody's Chief Executive Officer, will remain as part of the management team going forward.
Wolfhart Hauser, Chief Executive Officer of Intertek, commented: "Today's announcement marks an important stage in the ongoing development of Intertek. Moody operates in one of our core industries, the global energy market, which is set for strong long term growth. Moody is a successful company with a well regarded management team. The combination of Moody and Intertek provides a platform for the enlarged group to further develop its service offerings and network within the oil and gas industries specifically, but also to the wider energy and industrial markets. Intertek will now have a leading position in providing quality and safety services to the assets, processes and products for the energy market. The good match between the geographic exposure of the two businesses gives Intertek scale in new countries and the enlarged group a greater presence in the fastest growing regions of the world. We are also pleased to be merging our systems certification business with that of Moody. The businesses are strongly complementary with good geographic and customer fit and this will make Intertek a significant player in this industry."
Brendan Connolly, Chief Executive Officer of Moody, commented: "Moody and Intertek are a perfect fit. We can offer our world class technical inspection, consultancy and training services to Intertek's clients and we will benefit from the Intertek expertise in providing quality and safety services to existing, and often ageing, energy assets. By combining these two businesses, we will ensure that the enlarged group takes a leading position in the global energy market. The fit of our businesses also applies to the merger of our two strong systems certification platforms. Overall, this is a compelling combination."
Moody International Celebrates Milestone
100th Anniversary
In 1911 Virginius Daniel Moody established Moody Engineering for construction and electrical engineering projects. During the 1920's the rapid development of the oil and gas industry in the USA created a large new client base for Moody's services. In 1948, the company started to expand globally with its first international office in Japan. From the 1960's, through the new millennium, further growth of Moody International has extended into all major regions including AsiaPacific, the Americas, Europe, Africa, and the Middle East. Today, the USD $500M Moody International Group boasts a presence of 80+ offices in more than 60 countries.
2011 will be an exciting year for Moody International as the company celebrates its 100th anniversary! We have much planned throughout the year as we showcase our accomplishments, remember our history, thank clients and employees, and look forward to the successes in the many years to come.
Throughout the year, look for more news and information. Thank you for celebrating with us!
