Altrad to acquire Hertel

Altrad to acquire Hertel to create a leading company in multi-disciplinary technical services

Montpellier (France), Rotterdam (the Netherlands), 16 March 2015

Altrad and the shareholders of Hertel have reached an agreement with respect to the acquisition by Altrad of Hertel’s worldwide access solutions, insulation, corrosion protection and mechanical businesses.

This agreement has the full support of Hertel’s management and is subject to the customary approval of competition authorities as well as completion of the consultation process with Hertel’s works council.

The transaction is expected to close in the second quarter of 2015.

The combination of Altrad and Hertel, which will have a joint annual turnover in excess of € 1.6 billion and employing approximately 17,000 people, will result in a leading company in its businesses in Europe, the Middle East, Caspian and Asia Pacific.

Hertel’s Offshore activities will not be included in the transaction. Offshore will be continued under the ownership of NPM Capital, Sofinim (the development capital affiliate of Ackermans & Van Haaren) and management. Hertel’s Offshore business had € 60 million turnover in 2014. The business will change its name going forward.

Highlights

* In 2014, under new leadership, Hertel has successfully completed a turnaround aimed at restoring Hertel’s financial and operational performance. Upon completion of the acquisition by Altrad, Hertel will become part of a strong independent groupoffering ample opportunities for further sustainable growth of its businesses in Europe, the Middle East, Caspian and Asia Pacific;

* For Altrad, the acquisition of Hertel is a major step to become a leading technical service provider in Europe and getting access to the Middle East, Caspian and Asia Pacific in industrial services;

* The combination of both companies will have a joint turnover of more than € 1.6 billion with 17,000 employees, and with a complementary portfolio of services and geographic presence. Both Altrad and Hertel realized some € 800 million turnover in 2014;

* Cross-sell opportunities between both companies’ existing customer bases, operating leverage through the maximized use of assets and exchange of both companies best practices will offer instant synergy opportunities;

* NPM Capital and Sofinim have been the majority shareholders of Hertel since 1998. They are convinced that with the acquisition by Altrad, a strong and strategic partner has been found and that the combination of both companies will create a leading company in Europe in its markets;

* Hertel will continue to operate under its current leadership and the Hertel brand.

“We consider Hertel a promising and exciting company with an attractive long-term growth potential, solid management and corporate values very similar to Altrad,” said Mohed Altrad, President Altrad Group. “Combining management teams with different sets of experience will enable us to actively exchange ideas and best practices thereby making the combination a benchmark in its industries.”

Tom Bamelis, chairman of the Hertel Supervisory Board said: “During the 17 years that Sofinim and NPM Capital have been shareholders, Hertel has developed from a regional company to a leading industrial services supplier, active in Europe, the Middle East, Caspian and Asia Pacific. The shareholders have supported the development of the company throughout this period. They are convinced that the Altrad-Hertel combination will bring new opportunities for further profitable growth.”

“We are excited about this new step in the rich history of Hertel,” said Victor Aquina, CEO of Hertel. “With dedication, we have been able to successfully finalize the turnaround of Hertel and developed a strong foundation, together with our shareholders, for a bright future for our company. Altrad will be an excellent partner enabling Hertel to realize its ambitions in accordance with our long term growth strategy. I am convinced that this transaction is in the best interest of Hertel , for our customers, our employees and our shareholders.”

Being one of the a world market leaders

The offerings of Altrad and Hertel are highly complementary, from a customer, geographical as well as products and services perspective. The rationale for combining the two companies is found in the following areas:

- The increased presence in Europe with a portfolio of multi-disciplinary services will be attractive for multinational operating customers searching for integrated solutions;

- The complementary nature of both product and services offerings will accelerate cross sell opportunities and cost synergies across all geographies;

- Being a scaffold manufacturer, Altrad will be able to supply Hertel directly with best in class scaffold material. For Hertel the security of supply of scaffold material on this scale will be of value to its businesses;

- Management and usage of equipment will be optimized across the two businesses and thereby reduce capital needs;

- Management teams will benefit from the different sets of experiences, competences and best practices.

Founded in 1984 by Mohed Altrad, Altrad has successfully developed since through a combination of organic growth and acquisitions and has today become one of the world’s leaders for scaffolding solutions as well as carrying, mixing and compacting products in both civil and industrial markets. Altrad has operations in 16 countries in Europe, Africa, Asia and America and turnover in more than 100 countries. Altrad’s annual turnover amounted € 860 million for its financial year ending August 2014.
Hertel is a leading international industrial services company supporting the need of customers around the globe with a range of customized solutions centered around access solutions, insulation corrosion protection and mechanical solutions. Hertel has operations in 16 countries spread over Europe, the Middle East, Caspian and Asia Pacific. Hertel’s annual turnover amounted € 815 million in 2014.

Transaction value and financing

The transaction will be completed for a total enterprise value of c. € 230 million

Altrad will finance the transaction :

- through convertible bonds (“ORA” and “OBSA”) subscribed by its financial shareholders BPI France, CM CIC Investissement, Arkéa Capital Investissement and BNP Paribas Développement

- and through a new syndicated loan with its historical banks, led by Natixis and BNP Paribas

A new bond issuance led by Natixis (“Euro PP”) should also take place during Q2 2015.

Advisors

KPMG and Allen & Overy have been acting as financial and legal advisors to NPM Capital and Sofinim.

E&Y has been dealing with the finance due diligence and Clifford Chance has been acting as legal advisor to Altrad.

De Pardieu Brocas Maffei has been acting as the legal advisor to the financing banks.

Duteil avocats has been acting as legal advisors to Altrad’s financial shareholders.

For more information please contact:

Altrad
T: +33 (0)4 99 64 06 05
E : admin@altrad.com
W : www.altrad.com Hertel
Hertel Holding B.V.
Peter Bassa MBA, Group Marketing & Communications Director
T: +31 10 295 82 03
M: +31 6 22 40 73 82
E: peter.bassa@hertel.com
W: www.hertel.com