WorleyParsons Acquires Canadian Colt Companies
WorleyParsons has announced the $A1.13 billion acquisition of the Colt Companies ("Colt"), a leading Canadian design and project services business. The acquisition creates a market leader in the high growth Canadian hydrocarbons market and provides a springboard for the next phase of WorleyParsons growth.
The acquisition price represents a multiple of 9.7 times pro forma EBITDA (earnings before interest tax depreciation and amortisation) of Colt for the 12 months ended 31 January 2007. On the assumption of a full year contribution by Colt to WorleyParsons, the pro forma accretion to the combined group's earnings per share (before synergies, amortisation and additional corporate and integration costs) for the 12 months to 31 December 2006 would be 16%. The Directors believe there is the potential for material synergies for the combined group. The acquisition is likely to complete in early March 2007.
Colt is a multi-disciplinary design and project services business with impressive upstream and downstream hydrocarbons capabilities particularly in the growing oil sands sector. It has been in operation for more than 30 years and is one of the largest providers of these services in Canada. Colt employs approximately 4,600 people through its network of offices in Calgary, Edmonton, Sarnia, Toronto and Anchorage, Alaska.
WorleyParsons Chief Executive Officer, Mr John Grill said: "This is a unique opportunity for WorleyParsons to secure a leading position in one of the world's largest and fastest growing hydrocarbons markets. The acquisition will also extend WorleyParsons' position as a Tier One service provider to the global hydrocarbons industry and materially enhance the group's heavy oil, oil sands and cold weather technical capabilities.
"We were attracted by Colt's experienced management team as well as its track record of profitable growth. This acquisition combines Colt with our substantial existing Canadian operations providing the global resources and systems to capitalise on the significant untapped demand in the Canadian market," he said.
Canada boasts the world's second largest volume of oil reserves at 179 billion barrels, of which 98% are within the oil sands. Capital expenditure in the Canadian oil sands sector alone is forecast to exceed C$125 billion over the next decade if announced projects proceed. Canada is currently the largest supplier of crude oil and petroleum products to the US. It is forecast to grow from its position as the eighth largest producer of crude oil globally to become the fourth largest by 2015.
Also commenting, the President of Colt, Mr Larry Benke, said: "This merger enables Colt to accelerate our growth strategy and combine with WorleyParsons' operations to leverage our extensive experience in oil sands having completed more than 3,000 oil sands projects. At the same time it enhances our ability to win and execute major projects in Canada and Alaska.
"WorleyParsons represented the perfect merger partner for us and this announcement marks the culmination of many months of effort evaluating opportunities and strategies for the future of Colt. The additional resources our business will gain through being part of the WorleyParsons group will provide the platform for a truly diversified engineering and project services business," he said.
Mr Larry Benke, President of Colt will be responsible for WorleyParsons Canadian operations and will be appointed, subject to completion of the acquisition, to the WorleyParsons Limited Board as an alternate director to Bill Hall. Key Colt senior management have committed to remain with WorleyParsons for a period of at least three years.
The acquisition is subject to regulatory approvals and customary conditions precedent.
The combined group will employ approximately 20,400 employees and operate in 97 offices in
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