RECOMMENDED CASH OFFER FOR HYDER CONSULTING PLC. by ARCADIS UK INVESTMENTS B.V.
a wholly-owned subsidiary of ARCADIS N.V.
- to be effected by means of a Scheme of Arrangement under Part 26 of the Companies Act 2006
Highlights
The Boards of ARCADIS N.V. ("ARCADIS") and Hyder Consulting PLC ("Hyder") are pleased to announce that they have reached agreement on the terms of a recommended cash offer pursuant to which ARCADIS UK Investments B.V. ("AUK Investments"), a wholly-owned subsidiary of ARCADIS, will acquire the entire issued and to be issued ordinary share capital of Hyder. The Offer is intended to be effected by means of a Court-sanctioned scheme of arrangement under Part 26 of the Companies Act.
Under the terms of the Offer, Hyder Shareholders will be entitled to receive:
for each Hyder Share
650 pence in cash
· The Offer values the entire issued and to be issued ordinary share capital of Hyder at approximately £256.2 million and represents:
- a premium of approximately 38.5 per cent. to the Closing Price per Hyder Share of 469 pence on 30 July 2014 (being the latest practicable date prior to this announcement);
- a premium of approximately 40.2 per cent. to the Volume Weighted Average Price per Hyder Share of 464 pence during the 3 month period to 30 July 2014 (being the latest practicable date prior to this announcement); and
- an Enterprise Value to EBITDA multiple of 11.2 times Hyder's 2014 EBITDA of £23.6 million. Including the realisation of synergies by year-end 2016, the Enterprise Value of the Offer is 6.9 times Hyder's 2014 EBITDA
· The transaction is expected to be accretive to ARCADIS' EPS within the first full year after the Offer completes.
· The ARCADIS Directors believe there is a compelling strategic rationale for the combination of Hyder and ARCADIS:
- the acquisition of Hyder is a natural step in the evolution of ARCADIS as the world's leading global design and consultancy firm;
- the addition of Hyder's leading design and engineering capabilities strengthens ARCADIS' integrated service offering in specific market sectors (infrastructure, buildings, water, natural resources) and geographies;
- the Enlarged Group will have a wider customer base, which the ARCADIS Directors believe will benefit from ARCADIS' greater scope and increased scale, bringing them new services and expertise;
- ARCADIS and Hyder operate in highly complementary geographies, strengthening ARCADIS' positions across key geographies, and establishing a footprint in new target markets sooner than previously anticipated;
- Hyder's global design excellence centres will provide ARCADIS with a strong base for its own global worksharing programme;
- the Enlarged Group will be able to achieve significant revenue and cost synergies including savings through the use of global design excellence centres; and
- ARCADIS and Hyder have a strong cultural fit and share core values; ARCADIS will benefit from being able to leverage the best talent across both businesses, whilst employees of the Enlarged Group will enjoy the significant career opportunities presented in a larger company.
· AUK Investments is providing the cash consideration payable under the Offer from a new acquisition financing facility arranged by HSBC, ING Bank N.V. and BNP Paribas Fortis SA/NV for these purposes.
· The Hyder Directors, who have been so advised by Investec, consider the terms of the Offer to be fair and reasonable. In providing advice to the Hyder Directors, Investec has taken into account the commercial assessments of the Hyder Directors.
· Accordingly, the Hyder Directors intend unanimously to recommend that Hyder Shareholders vote in favour of the resolutions relating to the Scheme at the Court Meeting and at the General Meeting as those Hyder Directors who hold Hyder Shares (and, in the case of Sir Alan Thomas and Ivor Catto, their wives) have irrevocably undertaken to do in respect of their own beneficial holdings of, in total, 1,159,917 Hyder Shares representing, in aggregate, approximately 3.0 per cent. of the ordinary share capital of Hyder in issue on 30 July 2014 (being the latest practicable date prior to this announcement). Further details of these irrevocable undertakings are set out in Appendix III to this announcement.
· AUK Investments has received letters of intent to vote in favour of the resolutions relating to the Scheme at the Court Meeting and at the General Meeting from Aberforth Partners LLP ("Aberforth") and
T. Rowe Price International Ltd. ("T. Rowe"), in respect of a total of 4,963,613 Hyder Shares, representing, in aggregate, approximately 12.8 per cent. of the ordinary share capital of Hyder in issue on 30 July 2014 (being the latest practicable date prior to this announcement).
· Therefore, AUK Investments has received, in total, irrevocable undertakings and letters of intent in respect of a total of 6,123,530 Hyder Shares, representing, in aggregate, 15.7 per cent. of the ordinary share capital of Hyder in issue on 30 July 2014 (being the latest practicable date prior to this announcement).
· ARCADIS, a company incorporated in The Netherlands, founded in 1888, is the leading global natural and built asset design and consultancy firm, working in partnership with its clients to deliver exceptional and sustainable outcomes through the application of design, consultancy, engineering, project and management services. ARCADIS differentiates itself through its talented and passionate people and its unique combination of capabilities covering the whole asset life cycle, its deep market sector insights and its ability to integrate health and safety and sustainability into the design and delivery of solutions across the globe. ARCADIS is publicly listed on the NYSE Euronext Amsterdam with a market capitalisation of approximately €1.74 billion as at 30 July 2014. ARCADIS reported gross revenues and Operating EBITA for the year ended 31 December 2013 of €2.5 billion and €188.4 million respectively, has approximately 22,000 employees and operates globally with a presence in North America, Emerging Markets, Continental Europe and the United Kingdom.
· Hyder is one of the world's longest established engineering consultancies, with a heritage that spans over two centuries. Headquartered in the UK, Hyder operates in Asia, Australia, the Middle East, Germany and the United Kingdom. Hyder employs approximately 4,500 people and applies global expertise coupled with local knowledge to create award winning solutions for the transport, property, utilities and environment sectors. Hyder has been listed on the London Stock Exchange since 2002, and reported revenues and EBITDA for the year ended 31 March 2014 of £296.8 million and £23.6 million respectively.
· Further details of the Offer and the Scheme will be contained in the Scheme Document which will be despatched to Hyder Shareholders and, for information purposes only, to participants in the Hyder Share Option Schemes as soon as reasonably practicable.
Commenting on the Offer, Neil McArthur, Chief Executive Officer of ARCADIS said:
"Hyder is a unique company with a long history of being involved in the leading edge of design and engineering. Through the transaction we see an excellent opportunity to better serve our clients by further deepening our capabilities in global design and engineering in growth markets whilst creating exciting career opportunities afforded by a stronger global growth platform for staff in both companies. The transaction will create value for ARCADIS shareholders by accelerating our sustainable growth strategy and through the synergy opportunities that arise from the combination."
Commenting on the Offer, Ivor Catto, Chief Executive of Hyder said:
"ARCADIS' recommended cash offer announced today represents a significant premium to Hyder's current share price. Although the Board believes that Hyder has a strong future as an independent business, it considers that this cash offer substantially recognises Hyder's growth prospects, and provides certainty, in cash, to our shareholders today. The resultant group should also provide further opportunities for our highly valued clients and staff."
This summary should be read in conjunction with, and is subject to, the full text of this announcement (including its Appendices). The Offer will be subject to the Conditions and further terms set out in Appendix I to this announcement and to the full terms and conditions to be set out in the Scheme Document. Appendix II to this announcement contains further details of the sources of information and bases of calculations set out in this announcement. Appendix III contains a summary of the irrevocable undertakings and letters of intent received by AUK Investments. Appendix IV contains definitions of certain expressions used in this summary and in this announcement.
