Norbert Dentressangle agree Christian Salvesen acquisition
Combined sales achieved in 2006 of c. euro 2.9 billion and approximately 390 sites in 13 countries
The Boards of Christian Salvesen and Norbert Dentressangle (GND) have announced that they have reached agreement on the terms of a recommended acquisition by GND of the entire issued and to be issued ordinary share capital of Christian Salvesen at a price of 92.0 pence in cash for each Christian Salvesen Share, valuing Christian Salvesen's fully diluted share capital at approximately £254.4 million.
The terms of the Transaction represent a premium of approximately 79.0% to the Closing Price of 51.5 pence for each Christian Salvesen Share on 24 September 2007, being the last business day prior to the announcement by Christian Salvesen that it had received approaches and a premium of approximately 58.0% to the average Closing Price of 58.2 pence for each Christian Salvesen Share for the three-month period prior to 24 September 2007.
GND believes that the Transaction has a compelling strategic and financial rationale including:
> creation of one of the European market leaders in transportation and logistics;
> enhancing GND's and Christian Salvesen's complementary strength including expansion of distribution networks and strengthening of presence in food and frozen products distribution;
> increasing GND's geographic footprint into the UK, Benelux and the Iberian Peninsula;
> attractive financial profile including potential for increased margins, strong cash flow and the realisation of significant synergies;
> building on Christian Salvesen's established Transport Division UK turnaround programme including initiatives underpinning efficiency and maintaining strong customer performance; and
> developing relationships with shared customers and pan-European clients through cross-selling initiatives, as well as approaching new clients with an expanded pan-European offering.
The consideration payable under the Transaction will be financed through existing cash resources and facilities being made available by Societe Generale.
GND has received irrevocable undertakings to vote in favour of the Transaction at the Court Meeting and the General Meeting from the Christian Salvesen Directors who hold Christian Salvesen Shares, certain members of the Salvesen family and other shareholders representing approximately 23.2% of the entire existing issued share capital of Christian Salvesen.
In addition, UBS Global Asset Management (UK) Ltd manages 26.83 million Christian Salvesen Shares (10.1 per cent.) and has irrevocably undertaken to exercise the voting rights attaching to these shares, except in the case where its clients do not permit UBS Global Asset Management (UK) Ltd to exercise voting rights on their behalf.
This transaction is a major step in the development of GND and its strategic plan to create a major player in the European market. The acquisition will allow GND to significantly expand its service offering to its customers. Christian Salvesen and GND have a strong strategic fit and share a common background, having both started life as family-owned enterprises.
The enlarged group will enter into the top echelon of European logistics and transport providers, with combined sales achieved in 2006 of c. euro 2.9 billion and approximately 390 sites in 13 countries. It will create a leading pan-European road transport provider, with combined revenues of euro 1.6 billion in 2006, and Europe's largest tractor and trailer fleet operator, with approximately 8,000 tractors and approximately 10,200 trailers. The acquisition will see it join the group of major European providers of logistics services, with combined revenues of euro 1.3 billion in 2006 and c. 4 million square metres of operated warehouse space.
GND believes the local networks of Christian Salvesen in key countries, including the UK, Benelux and Spain, will expand GND's overall offering and in addition GND's service offering will be strengthened through the contribution of a new activity for the group in shared user distribution; and GND believes the strong presence of Christian Salvesen in food and refrigerated products will continue to strengthen GND's current market position and service potential to clients.
Christian Salvesen's strong presence in the UK, Benelux and the Iberian Peninsula offers strategic scale for GND's current products and services; and GND has established positions in France, Italy and several Eastern European countries which, when linked with Christian Salvesen's geographic presence, will create a pan-European network.
GND also believes that there may be significant growth within the European market which it serves owing to potential increases in trade that will continue to be supported by the increasing distance between production zones and customer zones. Furthermore, GND believes a critical size is required to meet clients' expectations for a complete range of tailor-made transport and logistics solutions within Europe and that this Transaction will contribute significantly to GND's prospects within this market.
GND has considerable experience of integrating companies. GND has acquired approximately 40 companies over the past 20 years, which today represent more than 50.0% of GND's group revenue. During this period GND has successfully introduced its systems, processes and efficiencies into companies it has acquired, whilst retaining the core competencies and skills which each business has added to GND.
GND believes that its experience in acquiring and integrating acquired companies, along with the two groups' complementary cultures, will assist the integration and continued growth of the new combined group, which will be founded on the utilisation of best practices in each group.
GND expects the Transaction to deliver significant annual synergies of around euro 25.0 million before interest and taxes by 2010, driven by cost savings on purchases, back office costs and information systems. GND expects the transaction to be earnings accretive starting in the first year (before exceptional items such as one-off costs relating to synergies).
