SERCO GROUP PLC: Acquisition of remaining stake in Australian JV

Serco purchases remaining stake in Australian defence and marine services joint
7 November 2012 
Serco Group plc (Serco), the international services company, announces that it
has signed an agreement to purchase the remaining 50% equity stake in DMS
Maritime Pty Ltd from its joint venture partner P&O Maritime Services for a
consideration of A$106m (approximately £68m) payable in cash on completion. 
Maritime is expected to have net debt of around A$38m on completion, giving a
valuation for 100% of the business on a cash-free and debt-free basis of A$250m
(approximately £160m). The transaction strengthens Serco's position as a
leading defence services provider in Australia and in the growing marine
services market. 
DMS Maritime is one of Australia's largest maritime service operators, with
facilities in every major port and a technical support network that extends a
wide range of engineering and technical services across Asia Pacific. These
include: integrated management of through-life support covering vessel design,
build, modification, engineering and maintenance; marine systems support; port
services; maritime training; and specialist services such as under-sea
exploration and recovery. DMS Maritime manages, operates and maintains over 600
vessels in the region, with commercial, defence and government agency customers
including the Royal Australian Navy and the Australian Customs & Border
Protection Service. Its highly skilled and experienced workforce of around 450
employees and contractors supplies substantial expertise in project management,
systems integration and engineering to the marine industry. 
This transaction is key to Serco's strategy to grow our defence operations in
Australia, and in particular to pursue more complex opportunities that may
emerge from new capability requirements for the Australian Defence Force to be
detailed in its forthcoming White Paper 2013. It will allow Serco to fully
leverage DMS Maritime's defence systems integration, supply chain management
and through-life support capabilities across the maritime, land, systems and
ultimately aerospace domains. The transaction additionally provides Serco with
a platform to further expand the breadth of our marine services to the
commercial maritime market. This includes port infrastructure and related
services to the resources sector, driven by the ongoing high demand for
commodities and energy. 
For the year to 31 December 2012, DMS Maritime is expected to report revenues
of approximately £80m and an underlying operating profit of approximately 
As at 31 December 2011, DMS Maritime had reported total assets of approximately
£42m. Serco will consolidate the remaining 50% stake it has purchased 
completion of the transaction, which subject to consents and statutory
approvals is expected in the coming weeks. Transaction costs of approximately 
2m are expected to be incurred. The purchase will be funded from Serco's
existing debt facilities. 
Expectations are for continued good revenue growth and for margins to be
maintained. DMS Maritime has an order book of over £500m; Serco will include
within its order book the additional 50% that it now owns. The transaction is
expected to be accretive to earnings in the first full year following
Christopher Hyman, Chief Executive of Serco Group plc, said: "DMS Maritime is a
high quality business that we have known intimately since Serco first
established the joint venture some 15 years ago to provide a complex range of
harbour and offshore services for the Royal Australian Navy. The business
shares Serco's commitment to customer focus, has grown well and will be further
enhanced under our full ownership. We believe that it will benefit from the
continuing development of our defence business from a base support services
provider to a complex services integrator, and from the significant
opportunities that we see in the marine systems integration and services market
- both for government and private sector customers." 
For further information please contact Serco: 
Stuart Ford, Head of Investor Relations T +44 (0) 1256 386 226 
Marcus De Ville, Head of Media Relations T +44 (0) 1256 486 277 
About Serco 
Serco is a FTSE 100 international service company, which combines commercial
know-how with a deep public service ethos. 
Around the world, we improve essential services by managing people, processes,
technology and assets more effectively. We advise policy makers, design
innovative solutions, integrate systems and - most of all - deliver to the
Serco supports governments, agencies and companies who seek a trusted partner
with a solid track record of providing assured service excellence. Our people
offer operational, management and consulting expertise in the aviation, BPO,
defence, education, environmental services, facilities management, health, home
affairs, information and communications technology, knowledge services, local
government, science and nuclear, transport, welfare to work and the commercial
More information can be found at 
-0- Nov/07/2012 07:00 GMT
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