| Royal
BAM NBM acquires HBG from Grupo Dragados |
 |
June 11, 2002
Joint press release by Royal BAM NBM nv and Hollandsche
Beton Groep nv
The expectation is justified that Royal BAM NBM
and Grupo Dragados will reach agreement on the
acquisition of HBG by Royal BAM NBM
The proposed acquisition of HBG by Royal BAM
NBM is unanimously supported by the Executive
Board and the Supervisory Board of HBG
Royal BAM NBM intends to acquire all of the shares
in HBG held by Grupo Dragados for EUR 20.10 per
share in cash, implying an equity value of EUR
715 million for the whole of HBG
The acquisition strengthens Royal BAM NBM’s
position as market leader in the Benelux and adds
important Western-European markets and the USA
The new combination is one of the top 10 construction
companies in Europe with a pro forma turnover
of EUR 8.5 billion for the year 2001
Royal BAM NBM expects that the proposed acquisition
will have an immediate positive effect on its
earnings per share before and after goodwill amortisation
Royal BAM NBM will consult its shareholders in
an extraordinary general meeting of shareholders
to be held in the first half of July
Koninklijke BAM NBM nv (“Royal BAM NBM”)
herewith announces that the expectation is justified
that it will be able to reach agreement with Grupo
Dragados, S.A. (“Grupo Dragados”) on
the acquisition of Hollandsche Beton Groep nv
(“HBG”) by Royal BAM NBM. The intended
acquisition of HBG is unanimously supported by
the Executive and Supervisory Boards of Royal
BAM NBM and HBG.
Strategic rationale
Royal BAM NBM is convinced of the strategic fit
between the activities of HBG and Royal BAM NBM.
HBG represents a unique opportunity to further
accelerate expansion of Royal BAM NBM’s presence
in the Benelux market and obtain critical mass
in important Western-European markets and the
USA. The combination of Royal BAM NBM and HBG
creates added value by combining the knowledge
base and experience of both companies.
HBG has extensive know-how and experience for
example in large infrastructure projects, tunnelling,
private financing and facility management which
are partly complementary to Royal BAM NBM’s
business. As a result of the transaction Royal
BAM NBM will substantially increase its market
position as it will be able to realise large projects
outside its current home markets (Benelux). HBG’s
building, property development and infrastructure
activities will not only further strengthen Royal
BAM NBM’s position in the Benelux but will
also add strong market positions in the United
Kingdom, Ireland, Germany and the USA. Furthermore,
through HBG’s two-third stake in Ballast
Ham Dredging, Royal BAM NBM obtains a top position
in the world-wide dredging market.
Transaction structure
Royal BAM NBM will acquire all outstanding shares
of HBG currently held by Grupo Dragados for EUR
20.10 per share in cash. With this, Royal BAM
NBM has taken into account a level of provisions
it deemed advisable. The price per share may be
increased by EUR 1.15 to EUR 21.25 if HBG’s
net profit from its construction and infrastructure
activities exceeds EUR 100 million for the year
2002. This earn-out will be self-financed. Grupo
Dragados has not and will not receive any dividend
payment from HBG.
After completion of the transaction, Royal BAM
NBM will acquire the remaining shares of HBG not
held by Grupo Dragados (c. 0.3%) through open
market purchases or a minority buy-out procedure.
The new combination of Royal BAM NBM and HBG
The acquisition of HBG by Royal BAM NBM will create
a large construction group with a strong presence
in Western Europe and a combined order portfolio
of EUR 10.7 billion as at 31 March 2002. For the
year ending 31 December 2001, the new combination
would have realised a pro forma turnover of EUR
8.5 billion, an operating profit before goodwill
of EUR 171 million and a net profit from ordinary
activities before goodwill of EUR 105 million.
The new combination will employ approximately
32,000 people and will be market leader in the
Benelux and have a top 10 position in Europe.
The new combination has positions for 18,000
houses and 550,000 square meters of commercial
property in the Netherlands.
Large, high profile projects of both companies
include the High Speed Link (HSL), Betuweroute,
Westerscheldetunnel, WTC Amsterdam, Amsterdam
Zuidas and Zuidoost, Hall of Justice in Antwerp,
Munich airport, the Carquinez bridge in San Francisco
and the Channel Tunnel Rail Link.
Financing
The transaction will be financed by means of a
bridge facility and by available cash resources
of Royal BAM NBM. Royal BAM NBM intends to refinance
the bridge facility as soon as possible after
completion of the acquisition. For this purpose
Royal BAM NBM will examine all financing options
including ordinary shares, preference shares,
convertibles and other debt instruments, to ensure
the optimal financing package. Royal BAM NBM envisages
that, following the refinancing, the enlarged
group will have adequate solvency.
Profit forecast
On a stand-alone basis, Royal BAM NBM expects
an increase in net earnings both in 2002 and 2003.
The intended acquisition will lead to an immediate
increase in earnings per share, both before and
after goodwill amortisation.
Organisation and management of the new combination
Royal BAM NBM intends to expand its Executive
Board to comprise:
W. van Vonno PhD - Chairman*
C.J.A. Reigersman - Vice-Chairman**
A.J.D. Franklin, BEng, CEng, FICE, FCIOB, FIHT**
G.H. Hoefsloot**
J.A.P. van Oosten*
N.J. de Vries*
* Royal BAM NBM
** HBG
Furthermore, it is Royal BAM NBM’s intention
to request R.J.N. Abrahamsen and M.I. Platschorre,
currently part of HBG’s Supervisory Board,
to join its Supervisory Board.
Royal BAM NBM will combine the activities of
Royal BAM NBM and HBG at holding level. At operating
level, the integration of Royal BAM NBM’s
and HBG’s activities will initially be focused
on the coordination of activities between Royal
BAM NBM and HBG in markets where both companies
currently have operations. This means only the
Netherlands and Belgium.
The head office of the combination will be situated
at a new location in the region of Utrecht.
Employees
Royal BAM NBM does not expect that current levels
of employment will be affected as a result of
the proposed transaction as such. Moreover, Royal
BAM NBM is of the opinion that the new combination
will provide an excellent working environment
for all employees of Royal BAM NBM and HBG. Based
on the strength of the new combination and Royal
BAM NBM’s past experience with integration
processes, Royal BAM NBM is confident that the
new combination will remain an attractive employer
for both Royal BAM NBM’s and HBG’s employees.
Next steps
Royal BAM NBM expects to make the necessary filings
with the relevant competition authorities as soon
as possible. Parties are confident that the required
clearance from the competition authorities will
be obtained.
The Social and Economic Council Committee for
Merger Affairs (‘SER’), Euronext Amsterdam
and the relevant works councils and trade unions
of Royal BAM NBM and HBG have been informed. The
relevant works councils will be asked to render
their advice on the proposed transaction.
Royal BAM NBM will consult its shareholders with
respect to the transaction in an extraordinary
general meeting of shareholders, which the company
expects to hold in the first half of July.
Royal BAM NBM expects to close the transaction
in early August 2002.
Profile of Royal BAM
NBM
Royal BAM NBM initiates projects and develops,
builds and maintains structures and installations
for living, working, transport and recreation.
Royal BAM NBM operates through various operating
companies which are organised into four divisions:
BAM NBM Bouw, BAM NBM Vastgoed, BAM NBM Infra
and BAM NBM Techniek. Royal BAM NBM is the leading
construction company in the Benelux with its head
office located in Bunnik, the Netherlands. In
2001, Royal BAM NBM realised a turnover of EUR
2.9 billion and a net profit before goodwill amortisation
of EUR 44 million. Royal BAM NBM employs c. 13,000
people.
Profile of HBG
HBG is a European construction company executing
projects world-wide and focussing on all aspects
of construction as well as dredging activities
and consultancy and engineering. HBG’s head
office is located in Rijswijk, the Netherlands.
HBG employs about 19,000 people and holds top
positions in con-struction and infrastructure
markets in the Netherlands, Belgium, UK, Ireland,
Germany, the USA and the dredging market world-wide.
For 2001, HBG achieved turnover of EUR 5.6 billion
and a net profit from ordinary activities before
goodwill amortisation of EUR 61 million.
Further information
Royal BAM NBM nv:
W. van Vonno: +31 30 659 8383
Appendix: pro forma overview 2001 of Royal BAM
NBM including HBG
Pro forma combined divisional
breakdown of 2001 sales:
(x € million)
Construction & Property 4,300
Infra 3,619
Dredging 480
Mechanical / Electrical contracting 176
Consultancy and Engineering 141
Other 4
Total 8,720
Less: intercompany sales (187)
Total 8,533
Pro forma combined geographical
breakdown of 2001 sales:
(x € million)
The Netherlands 4.316
United Kingdom 1.709
Germany 932
USA 450
Ireland 370
Belgium 298
Other countries 645
Total 8.720
Less: intercompany sales (187)
Total 8.533
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