Weir to Sell Techna Businesses
The Weir Group PLC has entered into agreements to dispose of the desalination and water treatment businesses of its Techna Division to Veolia Water Systems, part of Veolia Water, the water division of Veolia Environnement.
The aggregate value of the transactions is £27.7 million, translating to £17.25 million on a debt free, cash free basis. The net proceeds will be re-invested in the Weir Group’s core operations. The companies include Weir Westgarth in Scotland, Weir Entropie in France and Weir Envig in South Africa. These businesses provide specialist engineering design and system solutions in the areas of water treatment and sulphate removal with operations in the UK, France, South Africa, North and South America, the Middle East and Australia. Together they represent less than 7 percent of Weir Group sales. The Division’s defence and liquid gas handling businesses of Weir Strachan & Henshaw and Weir LGE will remain within The Weir Group PLC.
The disposal of Weir Westgarth and Weir Entropie was completed on 8 July 2005 when £25.3 million of the aggregate consideration was paid. The disposal of the South African company is conditional on approval from the local competition authorities when the balance of the purchase price will be paid.
Mark Selway, Chief Executive of The Weir Group PLC, commented:
“The changing dynamics of the desalination market towards larger scale projects and a move from design and build to ownership makes this an area unattractive to the Weir Group. This transaction is consistent with our strategy to realise value from our non-core assets and to focus on our core operations. This complements our June disposal of Flowguard Ltd, our UK pulsation dampener business in the Engineered Products division for £2.9 million.
“The desalination and water treatment businesses, within Techna, have an excellent track record of developing specialist technologies for both the desalination and oil industries. We believe that Veolia is well positioned to further develop these businesses to realise their full potential and look forward to a continuing relationship supplying them with our specialist pumps, valves and engineering services.”
In the year ended 31 December 2004 the three desalination and water treatment businesses reported losses of £0.2 million on turnover of £46.9 million. Gross assets at 31 December 2004 were £33.9m and taking into account the transfer of the liabilities to the acquirer at closing, the transaction will deliver a profit on the sale to the Weir Group. The businesses have a total of 230 employees (68 in the UK). All employees including the Divisional Managing Director, Paul Capell, will transfer with the businesses.
Veolia Water Systems is the technology provider of Veolia Water, the water division of Veolia Environnement (www.veoliaenvironnement.com) and is the world leader in water treatment. A specialist in engineering and turnkey design/build projects, Veolia Water Systems creates a range of technological solutions. With headquarters in Paris, Veolia Water Systems operates in 50 countries worldwide.
Source: The Weir Group PLC