Babcock bags helicopter provider Avincis

 
Harriet Green
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UK engineering group Babcock International has said this morning that it’s agreed to buy Avincis, which provides search and rescue helicopters. Babcock says the move will bolster future growth, with Avincis a “clear strategic fit” for it.

The conditional agreement to pay £920m to buy Avincis from World Helicopters also sees Babcock assume Avincis’s net debt of £705m.

At the end of 2013, Avincis had an order book of approximately €2.3bn (£1.9bn).

The acquisition will be funded through a fully underwritten rights issue of five net ordinary shares at 790p for every 13 existing ordinary shares, raising around £1.1bn before expenses, says Babcock.

The rights issue offers shareholders a discount of 42 per cent - the stock's closing price was £13.66 yesterday.

Peter Rogers, chief executive of Babock, commented:

The proposed acquisition of Avincis meets Babcock's strategic objectives as it brings into the Babcock Group a market-leading business, delivering mission critical services and complex engineering support to blue-chip customers in multiple geographies.

Avincis already has a strong growth platform and its combination with Babcock will generate even greater expansion opportunities and value creation for Babcock's shareholders.

The transaction is subject to approval at Babcock's general meeting next month.