The Shaw Group Acquires Assets of Prospect Industries
PLC
BATON ROUGE, La.--(BUSINESS WIRE)--Nov. 14, 1997--The Shaw Group Inc.
(NYSE:SGR - news) announced today that it has purchased all of the capital stock or substantially
all of the assets of the principal operating businesses of Prospect Industries PLC (LSE:PPI) of
Derby, United Kingdom, for approximately $15.8 million in cash.
Prospect Industries PLC, a mechanical contractor and provider of turnkey piping systems serving
the power generating and process industries worldwide, operated through several wholly-owned
subsidiaries including Connex Pipe Systems, Inc. (Connex), a piping systems fabrication business
located in Troutville, Virginia; CBP Engineering Corp. (CBP), an abrasion and corrosion resistant
pipe systems specialist based in Pennsylvania; Aiton Australia Pty Limited, a piping systems, boiler
refurbishment and project management company based near Sydney, Australia; and Prospect
Engineering Limited (PEL), a provider of turnkey piping systems located in Derby, U.K. Prospect
also owned a 66% interest in Inflo Control Systems Limited (Inflo), a manufacturer of boiler steam
leak detection, acoustic mill and combustion monitoring equipment and related systems. For
Prospect's year ended September 30, 1996, its most recently published audited consolidated
financials, sales amounted to approximately $151 million.
Under the terms of the acquisition agreement, Shaw acquired all of the outstanding stock of Prospect
Overseas Limited, a U.K. holding company that holds the entire ownership interest in Connex and
CBP, Aiton Australia and certain assets of PEL, as well as Prospect's entire ownership interest in
Inflo. Shaw also assumed certain liabilities of PEL and Prospect relating to its employees and
pension plans.
All sterling numbers have been converted into U.S. dollars using an exchange rate of 1.6983, the
figure posted at the close of business on November 13, 1997.
J.M. Bernhard, Jr., Shaw's President and Chief Executive Officer, commented, ''The acquisition of
substantially all of the operations of Prospect Industries is consistent with Shaw's strategy to broaden
its participation in the global infrastructure build-up. For example, having operations in the U.K. will
qualify Shaw to participate on European-financed projects in the power generation and process
markets.''
''Prospect's expertise in constructing mechanical and other systems broadens the range of services
we can provide. We believe that Prospect's operations will prosper as part of The Shaw Group as
we focus its activities on its core strengths in pipe fabrication and construction,'' Bernhard concluded.
Looks like a wise acquisition to me. I hope Jeffries increases its target price to $36 as they alluded in the recent publication
regards,
greg |
