Driver Group plc Acquisition of initiate Consulting
Driver Group, the global construction consultancy to the construction and engineering industries, is pleased to announce the acquisition of initiate Consulting Limited ("Initiate"). Initiate are capital investment consultants providing development, project and construction management services to the infrastructure market in the UK. The total consideration for the acquisition is £5.3m and is being satisfied by way of an initial cash payment of £1.5m, satisfied out of the Company's existing financial resources, and by the issue of 1,594,274 new ordinary shares in Driver Group (the "Consideration Shares"). The remaining £2.185m is comprised of an additional cash element, which is deferred over a 2 year period. At the date of the acquisition, Initiate had net assets of £1.2m including net cash of £1.2m.
The acquisition enables Driver Group to immediately provide development and project management services on significant aviation, highway and rail projects across the UK and creates the opportunity to leverage existing project and dispute & advisory services in to this sector and to Initiate's client base. This is an excellent strategic fit for the Group, in a sector experiencing significant growth, for example through the Government's £375bn National Infrastructure Plan. Over the medium term, Driver Group will look to develop the Initiate offering to other regions where infrastructure-spend is at significant levels. As a result of the acquisition headcount in Driver Group will increase to c.440.
For the year ended 30 April 2014, Initiate reported turnover of £7.48m and operating profit of £0.73m. Given the complementary nature of the two businesses, the acquisition provides Driver Group with synergistic benefits. It fits perfectly with Driver Group's stated strategy of developing complementary service offerings that allow for leverage of the existing business and is expected to provide strong growth opportunities for the Company. The infrastructure market is particularly buoyant and the senior management of Initiate have significant experience in this area.
Steve Norris, a Director and shareholder of Initiate, will join the Board of Driver Group as Non-Executive Director with immediate effect.
Application has been made to the London Stock Exchange for the Consideration Shares to be admitted to trading on AIM ("Admission") which is expected to be on 12 December 2014.
The Consideration Shares will rank pari passu in all respects with the existing ordinary shares. Following Admission the enlarged issued share capital and the total voting rights of the Company will increase to 29,348,690 ordinary shares.
Dave Webster, CEO of Driver Group stated: "I am delighted with this acquisition as it provides a tremendous opportunity to provide a broader offering in the very important infrastructure market both in the UK and overseas. I would like to welcome Initiates CEO, David Law, to our Executive Board and Steve Norris to the Group Board and very much look forward to working with them to grow Initiate's services across the global footprint we have established in Driver Group."
David Law, CEO of Initiate staed: "I am delighted to be joining the Driver Group as part of the Executive Board. I firmly believe that we can move forward with confidence with a growth strategy based on core clients in transport infrastructure in the UK and a wider international market that the Driver Group can provide. This is an excellent strategic fit for both parties and I am fully aligned to deliver the growth targets for the Driver Group."