HARSCO CORPORATION ANNOUNCES AGREEMENT TO ACQUIRE MULTISERV INTERNATIONAL, N.V.
HARRISBURG, Pa., July 9 /PRNewswire/ -- Malcolm W. Gambill, chairman and chief executive officer of Harsco Corporation (NYSE: HSC), today announced that Harsco has entered into a definitive purchase agreement with shareholders representing the majority of the shares of MultiServ International, N.V. for the acquisition of all of the outstanding capital stock of MultiServ International, N.V. The acquisition is expected to close in the third quarter of 1993. The MultiServ acquisition would have a consideration of approximately $380 million, consisting primarily of cash and the assumption of certain MultiServ indebtedness. Harsco expects to finance up to 25 percent of the transaction from its cash resources, up to 3 percent with Harsco treasury stock for key senior executives of MultiServ, and the remainder by borrowing from various committed sources. MultiServ operates exclusively outside of North America and in its sphere is the leader in metal reclamation and specialized steel mill services. MultiServ's headquarters are located in London, England. MultiServ has operations in 21 countries, including many in Europe and Latin America, as well as in Russia, Australia and China. The company generates annual revenues of about $350 million through contracts with 71 steel mills. These contracts are normally long-term, inflation- indexed, in convertible-currency or are U.S. dollar-denominated. This acquisition would complement the existing strength of Harsco's Heckett Division, which is primarily based in North America, but also has several significant locations in Europe, Indonesia, India, South Africa and Saudi Arabia. The acquisition would increase the number of countries for which Harsco provides metal reclamation and specialized steel mill services from 11 to 28. The operating locations would increase from 62 to 133, and the total combined employment, including equity interest companies, would be about 8,000. In addition to the operating synergies inherent in their basic businesses, Heckett and MultiServ have complementary new technologies, particularly in the area of electric arc furnace flue-dust treatment and recycling. In this regard, Heckett has brought to the contract stage the briquetting of electric furnace flue dust, and MultiServ has developed the Plasminox process, as well as other useful environmentally-friendly processes and technologies. MultiServ offers the Androfer scarfing process and has as a group resource, Pyroserv, which is on the leading edge of flame technology, particularly relating to scarfing and the precision cutting of slabs, plate and scrap materials. These technologies are supported by patents and substantial know-how, which significantly improve the customers' environment, cost and product quality. Gambill commented, "Harsco's acquisition of MultiServ is a major strategic move and is comparable to the equally significant step taken by Harsco (then known as Harrisburg Steel Company) some 40 years ago in acquiring what is now the Heckett Division. This acquisition will position Harsco as the worldwide leader in the provision of specialized steel mill services to steel producers and offers exciting profit and growth prospects. In addition to the benefits of combining technologies and operating and processing expertise, shareholder value will be significantly enhanced by synergies in administration, financing and taxation, purchasing, and marketing capabilities in the world-wide steel producing countries. The combination of these two very experienced, world-class management teams is of particular significance." Gambill continued, "MultiServ's President and Chief Executive Officer Adrian H. H. Bowden, the founder of its predecessor company in 1966, will head the combined Heckett-MultiServ operations. Mr. Bowden has been responsible for the effective performance and strategic development of all aspects of MultiServ." Gambill continued, "In the latter part of 1992, Harsco and FMC Corporation announced their intent to combine Harsco's BMY-Combat Systems Division and the Defense Systems Group of FMC, with Harsco holding a 40 percent partnership interest. These businesses are expected to produce revenues in 1993 totaling $1.2 billion. This combination with FMC, together with the MultiServ acquisition, would further facilitate Harsco's strategic shift toward industrial products and services. After the purchase of MultiServ and the pending transfer of Harsco's BMY-Combat Systems Division to the FMC partnership, Harsco's 1994 sales are projected to be about $1.3 billion. The FMC partnership sales would be recorded by Harsco under the equity method of accounting and are excluded from the projected sales." The combined HeckettMultiServ companies, excluding the possible effect of the proposed partnership with FMC, are expected to generate sufficient cash flow to return Harsco's debt ratio from approximately 44 percent of capitalization, immediately after this acquisition, to its current level of approximately 22 percent in less than five years, while at the same time preserving the capability to pursue other business opportunities and to maintain or increase the dividend. The effect of the acquisition may cause a minimal decrease in earnings per share for 1993, should be neutral for 1994 and would produce steadily increasing earnings in 1995 and beyond. Gambill concluded, "This agreement has the approval of the Harsco Board of Directors and is only subject to satisfactory completion of confirmatory due diligence and the receipt of necessary regulatory approvals." Harsco Corporation is a diversified industrial manufacturing and service company headquartered in Camp Hill, Pa. Harsco's 11 divisions provide products and services for defense, industrial, commercial and construction applications from over 100 major facilities in the United States and 13 foreign countries. /delval/ -0- 7/9/93 /CONTACT: Demi Hetrick of Harsco, 717-763-7064/ (HSC)
CO: Harsco Corporation; MultiServ International, N.V. ST: Pennsylvania IN: ARO SU: TNM
MK -- PH003 -- 9800 07/09/93 09:05 EDT
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|Date:||Jul 9, 1993|
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