Proposed Acquisition of North American Piling

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED IN IT IS NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, NEW ZEALAND, THE REPUBLIC OF IRELAND, THE REPUBLIC OF SOUTH AFRICA OR ANY JURISDICTION IN WHICH THE SAME WOULD BE UNLAWFUL.

For immediate release

Keller Group plc (“Keller” or “the Group”)

Proposed Acquisition of North American Piling

Keller (LSE: KLR), the international ground engineering specialist, today announces the proposed acquisition of North American Piling from North American Energy Partners Inc. (“North American Energy Partners”), subject to shareholder approval.

Key Highlights

North American Piling is a substantial Canadian foundations business, headquartered in Edmonton, Alberta, and has over 25 years’ experience providing piling services, with a focus on piling in construction markets across Canada, including the Alberta oil sands region.
North American Piling employs approximately 400 staff and, in the year ended 31 March 2013, the business reported revenue of CDN $236.5 million (£149.7 million) and operating profit of CDN $38.5 million (£24.4 million).

The Acquisition is consistent with Keller’s stated strategy and the Directors believe it will enhance the Group’s offering by:

• bringing into the Group a market-leading business, positioned in growth markets offering attractive margins;
• increasing its exposure to the North American energy and resources sector;
• providing the opportunity to develop broader customer relationships and secure new customers;
• expanding its presence in the relatively under-developed Canadian geotechnical segment; and
• delivering attractive financial metrics, including an immediate and significant enhancement in earnings per share.

The consideration will comprise an initial CDN$227.5 million (£144.0 million) on a cash and debt free basis, payable in cash on Completion and up to a further CDN$92.5 million (£58.5 million) of deferred contingent consideration payable in cash depending upon North American Piling’s financial performance in the three years following Completion, giving a maximum aggregate consideration of CDN$320 million (£202.5 million).

Keller is proposing to finance the Acquisition through the net proceeds of the Placing announced today, together with the drawdown of some of the available funds under the New Bank Facility and existing bank facilities.

Commenting on the Acquisition, Justin Atkinson, Chief Executive of Keller, said:

“The Board has identified Canada as a key target market and this acquisition of a complementary piling business represents an excellent opportunity to build substantially on Keller’s existing presence in that market. North American Piling is a market-leading business with attractive margins positioned in growth markets, including the resource-rich regions of Western Canada. The business has a strong record of growth delivered by an experienced management team who are transferring to Keller. Importantly, the acquisition will be significantly earnings enhancing*.”

*  This should not be construed as a profit forecast. In particular, it should not be taken to mean that the earnings per share of Keller for the year ending 31 December 2013 will necessarily be higher than for the year ended 31 December 2012.

Analyst conference call

A conference call for analysts and investors will be held this morning at 9:00am with a replay facility made available later today. For details please contact RLM Finsbury on 020 7251 3801.

The Circular, containing details of the Acquisition and the notice of the Keller General Meeting at which a resolution will be proposed for the approval of the Acquisition by Keller Shareholders, will be published and posted to Keller Shareholders as soon as possible. The Circular will be made available by Keller on its website at www.keller.co.uk/investor.aspx.

This summary should be read in conjunction with the full text of this announcement

Jefferies International Limited (“Jefferies”) is acting as exclusive financial advisor and joint sponsor to Keller on the acquisition and joint bookrunner and underwriter on the equity placing. Investec Bank plc (“Investec”) is acting as joint sponsor to Keller on the acquisition and joint bookrunner and underwriter on the equity placing.

For further information, please contact:

Keller

Justin Atkinson, Chief Executive
James Hind, Finance Director    +44 (0) 20 7616 7575

Jefferies (Financial advisor, Joint Sponsor and Joint Bookrunner)

Simon Hardy
Andrew Bell
Harry Nicholas    +44 (0) 20 7029 8000

Investec (Joint Sponsor and Joint Bookrunner)

Keith Anderson
James Rudd
Cara Griffiths    +44 (0) 20 7597 5970

RLM Finsbury

Gordon Simpson
Rowley Hudson    +44 (0) 20 7251 3801

This announcement is not an offer to sell, or a solicitation of an offer to buy (in either case in the United States) any ordinary shares to be issued pursuant to the equity placing announced by Keller today in connection with the Acquisition. The shares have not been and will not be registered under the US Securities Act of 1933, as amended (the "Securities Act"), and may not be offered or sold, directly or indirectly, in the United States absent registration or an exemption from registration. There will be no public offering of securities in the United States. The shares have not been and will not be registered with any regulatory authority of any state within the United States.

Forward-looking Statements

Certain statements made in this document constitute forward looking statements. Forward looking statements can be identified by the use of words such as “may”, “will”, “should”, “predict”, “assurance”, “aim”, “hope”, “risk”, “expect”, “intend”, “estimate”, “anticipate”, “believe”, “plan”, “seek”, “continue” or other similar expressions that are predictive or indicative of future events. All statements other than statements of historical facts included in this document, including, without limitation, those regarding the Group’s expectations, intentions and beliefs concerning, amongst other things, the Group’s results of operations, financial position, growth strategy, prospects, dividend policy and the industries in which the Group and, following Completion, the Enlarged Group operates, are forward looking statements. By their nature, such forward looking statements involve known and unknown risks, uncertainties and other factors, many of which are outside the control of the Group and its Directors, which may cause the actual results, performance, achievements, dividends of the Group and, following Completion, the Enlarged Group or industry results to be materially different from any future results, performance or achievements expressed or implied by such forward looking statements. As such, forward looking statements are no guarantee of future performance.

Such forward looking statements are based on numerous assumptions regarding the Group’s present and future business strategies and the environment in which the Group will operate in the future. Among the important factors that could cause the Group’s actual results, performance or achievements to differ materially from those in the forward looking statements include, among others, economic conditions in the relevant markets of the world, market position of Keller or its subsidiaries, earnings, financial position, return on capital and operating margins, political uncertainty, the actions of competitors, activities by governmental authorities such as changes in taxation or regulation, changing business or other market conditions and general economic conditions and such other risk factors identified in the “Risk Factors” section of the Circular. Forward looking statements should, therefore, be construed in light of such risk factors and undue reliance should not be placed on forward looking statements. These forward looking statements speak only as of the date of this document and are not intended to give assurance as to future results. The Group will update this document as required by applicable law, including the City Code on Takeovers and Mergers, Listing Rules, Prospectus Rules and/or the Disclosure and Transparency Rules of the Financial Conduct Authority, but otherwise expressly disclaims any such obligation or undertaking to release publicly any updates or revisions to any forward looking statement contained herein to reflect any change in Keller’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

Investec, which is authorised in the UK by the PRA and regulated in the UK by the PRA and the FCA, is acting exclusively for Keller in connection with the Acquisition and not for any other person and will not be responsible to any person other than Keller for providing the protections afforded to its clients, or for providing advice in relation to the Acquisition, the contents of this document and the accompanying documents or any arrangements referred to therein.

Jefferies, which is authorised and regulated in the UK by the FCA, is acting exclusively for Keller in connection with the Acquisition and not for any other person and will not be responsible to any person other than Keller for providing the protections afforded to its clients, or for providing advice in relation to the Acquisition, the contents of this document and the accompanying documents or any arrangements referred to therein.

Keller publishes its financial statements in pounds Sterling ("£" or "Sterling"). The abbreviation “£m” represents millions of pounds Sterling, and references to “pence” and “p” represent pence. References to “US dollars”, “USD” or “US$” are to the lawful currency of the United States of America and references to “CDN$” or “Canadian dollars” are to the lawful currency of Canada. Unless otherwise stated, exchange rates of £ to CDN$: 1:1.58 and £ to US$: 1:1.55 have been used in this document.