Transfield to buy Areva services business

Australia's Transfield Services has agreed to buy the Australasian electrical and telecommunications services business of the Areva Group for $210 million.

Transfield said the French-owned business, with regional headquarters in Auckland, had 1900 employees.

The purchase price implies a prospective ebitda (earnings before interest, tax, depreciation and amortisation) multiple of 6.9 times based on forecast earnings.

Areva is a broad-based engineering services business that provides services to infrastructure and industrial providers such as Telecom and TransPower. It has more than 600 subcontractors.

The company's Australian and New Zealand services have grown in turnover from $70 million in 1996 to $300 million this year.

About 56 per cent of turnover is derived in New Zealand and the rest in Australia.

The company has 45 service centres in New Zealand and 28 in Australia.

Transfield managing director Peter Watson said the acquisition met the strategy of acquiring businesses which provided geographic and industry expansion, as well as providing an introduction to new clients.

"This is a major acquisition which significantly increases the size of our existing business and includes a highly skilled workforce."

Areva managing director Geoff Hunt would continue to run the business.

Watson said the acquisition positioned Transfield to take advantage of the infrastructure reinvestment cycle for the Australasian electricity industry, where major investment was forecast over the next few years.

"It also makes Transfield Services one of the largest service providers to the telecommunications industry in Australasia."

Areva chairman Phillippe Guillemot said the sale would allow the company to focus on its core activities as a product and systems provider.

- NZPA