BASIL READ AND TWP ANNOUNCE MERGER

JSE-listed multi-disciplinary EPCM engineering firm TWP Holdings has merged with leading construction firm Basil Read, effectively creating a force to be reckoned with in South Africa’s EPC (Engineering, Procurement and Construction) arena.

The merger, effective from December 2009, has taken 12 months to finalise what Basil Read CEO Marius Heyns describes as “a very well orchestrated deal”.

Basil Read will pay out 37,3-million new ordinary shares, as well as R143-million in cash, in the ratio of 31,16 new Basil Read shares and R119,96 for every 100 TWP shares. TWP’s Nigel Townshend will remain in his position as CEO and has been appointed to the main Basil Read Holdings Limited’s board of directors, as well as to Basil Read (Pty) Ltd’s executive committee.

As part of its future strategy, Heyns says Basil Read has been actively seeking to acquire an engineering concern for some time, investigating possibilities both locally and in the international market.

“I foresee that globally there will be a need for large numbers of skilled engineers and architects to tackle the imminent population growth issues of food, water and energy scarcity, as well as major infrastructure requirements,” he says. “I believe that engineers will be at the forefront of the professionals tasked with solving these conundrums — specifically design engineers.

“We’ve been following TWP’s performance since it listed on the main board of the JSE in November 2007 and approached the company with a merger offer in January 2009. Early on in our discussions it became evident that a number of synergies existed between the two companies and that a merger would take both of us to a whole new level of capability. We discovered that Nigel’s vision was to diversify into EPC, while we were looking for EPC capability.

“By joining forces we can now approach clients across a spectrum of sectors with a fast-track turnkey offering — a total package. So we’re very excited about the merger and most of our clients globally have also responded extremely positively to this development.

“The company is financially in very good health and continues to have an impressive turnover, while its 900 strong team of engineers and architects will prove valuable currency in the months and years ahead. One of our objectives was to create critical mass for Basil Read and TWP’s balance sheet will put us in a stronger position for future acquisitions.

“Everyone knows the economy is cyclic, and working in parallel with TWP we will be in an ideal position to catch the next wave of development both here in South Africa and in other parts of the world,” says Heyns. “There is a massive amount of work coming through in our own country and elsewhere and I see oil and gas as a major prospect. We intend to expand strongly into this area and average out the accompanying risks by entering other sectors as well.

“There’s talk about industrial uncertainty after the FIFA World Cup 2010, but we’re already gearing up to take on larger and more complex projects, focusing on where there are deficiencies in infrastructure. TWP will play a key role in this in terms of the total package we can now offer.”

TWP’s Nigel Townshend comments: “TWP has been looking at EPC work for some time and undertaken a number of smaller projects on this basis. The tie-up with Basil Read will however fast-track our ambitions in this arena and help diversify TWP’s offerings into the infrastructure field.

“We have been in discussions with Basil Read for almost a year and have come to appreciate that there is good cultural and entrepreneurial alignment. We look forward to playing a key role in the expanded group and have big plans for the future which together will be achievable.”

Issued by:  Serendipity Events, Promotions & Exhibitions
On behalf of: BASIL READ / TWP
Editorial contact: Loll Thomson (011) 467 2133 / loll@sepe.co.za
Client contact: Basil Read - Marius Heyns (011) 418 6300 / mheyns@basilread.co.za
                           TWP - Nigel Townsend (011) 218 3000 / ntownshend@twp.co.za 

Date:  08 December 2009