Lamprell has completed the sale of one of its service businesses, International Inspection Services Ltd. (‘INSPEC’), which is a UAE-based provider of non-destructive testing (‘NDT’) and associated services to the energy industry.
Lamprell has today completed the sale of INSPEC to Intertek Testing Services Holdings Limited for a total cash consideration of US$66.2 million. Lamprell will remain a significant customer of INSPEC and, as part of the sale agreement, the Group has also entered into a multi-year preferred supplier agreement with Intertek for the provision of services by INSPEC. This secures the supply of high quality NDT services for the Group for the medium term.
Established in 1993, INSPEC operates across the UAE and Oman, employing 720 staff, and delivered a positive performance during 2012 with a net profit of US$6.3 million (based on the 2012 audited accounts and excluding a provision for impairment of trade receivables of US$1.3 million). Audited gross assets for the INSPEC business as at 31 December 2012 totalled US$26.0 million.
As previously announced, the Board has been reviewing the ownership of certain service businesses which do not form part of the Group’s core business, of which INSPEC was one. The Group will continue with its process to dispose of the other non-core service businesses but only if acceptable terms can be obtained and subject to Board approval.
Lamprell will use part of the proceeds from this disposal to pay down a substantial part of the high cost portion of our secured debt facility that was put in place last year. The remaining proceeds will be used to further develop the strategy to enable strong project execution and maximise efficiency and productivity opportunities within the Group.
James Moffat, Chief Executive Officer, Lamprell, said:
“Over the last 18 months, Lamprell has refocused on its core activities of new build rigs, new build construction, land rigs and rig refurbishments. As a result, the Group has been actively pursuing options to dispose of certain of its service businesses and this disposal is a key part of that strategy. INSPEC is a good strategic and geographic fit for Intertek and we look forward to continuing our working relationship.”
Press Release, March 03, 2014