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Pennon Group Acquires Bournemouth Water for GBP 100.3m.

M2 EQUITYBITES-April 16, 2015-Pennon Group Acquires Bournemouth Water for GBP 100.3m


16 April 2015 - UK-based infrastructure company Pennon Group Plc has acquired 100% of the issued share capital of Sembcorp Bournemouth Water Investments Ltd. from Sembcorp Holdings Ltd. for a cash consideration of GBP 100.3m (USD 149.62m), the company said on Thursday.

The deal includes Bournemouth Water's non-regulated and regulated subsidiaries from

As part of the acquisition GBP 86.9m of external net debt and debt like items have been assumed by Pennon.

Sembcorp Bournemouth Water Investments Ltd. is the holding company for Sembcorp Bournemouth Water Ltd. and includes a developing non-regulated business providing a platform for retail expansion and the provision of value added services to customers.

For the year ended 31 December 2014, the acquired businesses had combined revenues of GBP 49.2m, operating profits of GBP 15.3m and profit before tax of GBP 10.2m.

Sembcorp Bournemouth Water Ltd. is a regulated water only company serving a population of approximately 440,000 in the Bournemouth region, with a Regulatory Capital Value of GBP 148.8m as at 31 March 2014.

The Pennon Board considers the acquisition to be highly complementary to its South West Water Ltd. holding and it believes that it presents an attractive opportunity to expand South West Water's wholesale capabilities whilst driving synergistic and best practice operations.

The company said it expects to receive a decision from the CMA within its usual timescales. It is understood that the CMA will deploy usual considerations in coming to its conclusion on the merger clearance.

Pennon proposes to replenish cash resources used for the cash consideration through a placing of new Ordinary Shares to raise up to GBP 100.3m.

Pennon Group is an environmental utility infrastructure company which owns South West Water Ltd. and Viridor Ltd.. The Group has assets of around GBP 5bn and a workforce of around 4,500 people.

South West Water provides water and sewerage services to a population of approximately 1.7m in Devon and Cornwall and parts of Dorset and Somerset.

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Publication:M2 EquityBites (EQB)
Date:Apr 16, 2015
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