Layne Christensen Acquires Remaining Interest in Costa Fortuna
MISSION WOODS, Kan., June 19, 2012 (GLOBE NEWSWIRE) -- Layne Christensen Company (Nasdaq:LAYN) ("Layne" or the "Company") announced today that it has acquired the remaining 50% interest of Costa Fortuna Fundacoes e Construcoes Ltda ("Costa Fortuna") that it did not previously own. Layne acquired its initial 50% interest in Costa Fortuna in July 2010
Costa Fortuna, with operations in Sao Paulo, Brazil and Montevideo, Uruguay, is part of Layne's Geoconstruction Group and is one of the largest providers of specialty foundation and specialized marine geotechnical services in South America. Costa Fortuna specializes in the implementation of large-diameter bored piles, diaphragm walls, root piles, soil nailing, jet grouting, investigatory geotechnical services, and maritime and river specialized foundations.
For calendar year 2011, Costa Fortuna had revenues of $49.5 million, net income of $7.8 million, and EBITDA of $13.9 million. Layne will recognize 100% of Costa Fortuna's revenues and profits beginning in the second quarter ending July 31, 2012. Costa Fortuna's backlog at April 30, 2012 was $55 million.
Total consideration paid by Layne for the remaining 50% interest was $16.15 million, bringing Layne's total investment in Costa Fortuna to $32.3 million for a 100% interest, plus the assumption of $9 million in debt. The value of the acquisition is approximately three times EBITDA. Escrow of $2.4 million will be held for two years.
Layne CEO, Rene Robichaud, stated, "Costa Fortuna has been a strong performer, and we believe that there is a significant opportunity to expand Layne's geotechnical construction capabilities in South America over the next several years. The Brazilian construction market is estimated at well over $100 billion for the next five years, with a substantial portion expected in market opportunities generated by the World Cup in 2014 and the Olympic Games in 2016. As a market leader in South America, Costa Fortuna enjoys established construction industry partnerships, a track record of successfully completing specialized, complex projects, and a reputation for integrity and dependability. They will fit nicely as we apply the principles of OneLayne to pursue solutions-based project opportunities across all divisions and geographies."
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This press release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act of 1934. Such statements may include, but are not limited to, statements of plans and objectives, statements of future economic performance and statements of assumptions underlying such statements, and statements of management's intentions, hopes, beliefs, expectations or predictions of the future. Forward-looking statements can often be identified by the use of forward-looking terminology, such as "should," "intended," "continue," "believe," "may," "hope," "anticipate," "goal," "forecast," "plan," "estimate" and similar words or phrases. Such statements are based on current expectations and are subject to certain risks, uncertainties and assumptions, including but not limited to: the outcome of the ongoing internal investigation into, among other things, the legality, under the FCPA and local laws, of certain payments to agents and other third parties interacting with government officials in certain countries in Africa relating to the payment of taxes and the importing of equipment (including any government enforcement action which could arise out of the matters under review or that the matters under review may have resulted in a higher dollar amount of payments or may have a greater financial or business impact than management currently anticipates), prevailing prices for various commodities, unanticipated slowdowns in the Company's major markets, the availability of credit, the risks and uncertainties normally incident to the construction industry and exploration for and development and production of oil and gas, the impact of competition, the effectiveness of operational changes expected to increase efficiency and productivity, worldwide economic and political conditions and foreign currency fluctuations that may affect worldwide results of operations. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially and adversely from those anticipated, estimated or projected. These forward-looking statements are made as of the date of this filing, and the Company assumes no obligation to update such forward-looking statements or to update the reasons why actual results could differ materially from those anticipated in such forward-looking statements.
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