Transfield to buy NZ and Australian operations of Areva

Australia's Transfield Services said today it had agreed to buy the New Zealand and Australian electrical and telecommunications services business of the Areva Group for A$193 million ($210 million).

Transfield said the French owned business, with regional headquarters in Auckland, provided engineering and maintenance services to infrastructure and industrial providers and had 1900 employees.

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

Areva is a broad-based engineering services business that provides services to infrastructure and industrial providers such as Telecom and Trans Power. It is based in Auckland and has over 600 sub-contractors.

The New Zealand and Australian service activities to be acquired have grown in turnover from $70 to $300 million from 1996 to 2004.

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 provide 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's current managing director, Geoff Hunt, will continue to run the business.

Mr Watson said the acquisition positioned Transfield to take advantage of the infrastructure reinvestment cycle for the electricity industry in New Zealand and Australia, where significant investment is 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.

Transfield said the acquisition would be share positive in the first year of ownership.

The agreement is subject to regulatory approvals and standard conditions precedent and completion should occur by April 2005.

- NZPA