Ausenco Acquires Sandwell And Vector Engineering

Global engineering services group, Ausenco has significantly expanded its global
services offerings and markets with the acquisition of two resources industry engineering companies Sandwell International Inc. and Vector Engineering Inc., for A$117 million.
Sandwell and Vector are the world leaders in their sectors. Sandwell specialises in engineering of ports and bulk materials handling systems, energy and industrial process sectors for the mining and oil and gas industries while Vector Engineering specialises in geotechnical, civil, environmental and water resource services.
Ausenco's Chief Executive Officer, Zimi Meka, said that Sandwell and Vector, together with the recently announced PSI acquisition, increased Ausenco's geographic coverage and provided it with a greatly expanded range of services that it could offer to the resources industry.
Ausenco will acquire the Vector business for an initial payment of US$31 million (A$34 million), which represents a multiple of 7.9 times pro-forma forecast EBIT for the 12 months ending 31 March 2008. Effective from 1 April 2008, completion is expected by mid May 2008.
The Vector Engineering group is regarded as one of the world's leading consultants in the water and environmental services market with specific capabilities in the solid waste, energy and oil and gas sectors.
"This is a strategic acquisition for Ausenco which enables early project entry, particularly through its specialist engineering and environmental services, well before other EPCM firms," said Meka, "This acquisition will also extend Ausenco's position as a global services provider to the mining industry and will materially enhance the group's mining and minerals engineering services with
diversification into the environmental, energy and oil and gas sectors. We were also attracted by Vector's strong foothold in the rapidly growing environmental business of landfills which provide decades of continuous revenue. This acquisition will enhance our ability to support clients across all our industry sectors in the areas of water and environmental services," he said.
Vector is a world leader in the design and construction of heap leach (over 80% market share in South America) and tailings storage projects with Anglo American, BHP Billiton, Codelco, Phelps Dodge, Rio Tinto, Vale and Xstrata as clients.
In the energy and oil and gas sectors, Vector is currently working on the largest US nuclear power generating facility and the largest gas pipeline project in Argentina.
Vector's President, Mark Smith, would continue to be responsible for Vector's global operations and key Vector senior management have committed to remain with Ausenco for a period of at least three years, said Meka.