VT Group - a UK defence and support service company - has agreed to acquire the British Nuclear Group Project Services (BNGPS) business from British Nuclear Group (BNG), itself a subsidiary of BNFL.
BNGPS employs some 750 workers with extensive technical waste and decommissioning expertise in the nuclear and hazardous waste industries. BNGPS has many contracts at civil nuclear sites in the UK, including significant involvement at Magnox nuclear power plants and the Sellafield site, Europe's largest. It performs that work as a contractor for the sites' owner, the Nuclear Decommissioning Authority, which in future will put such work out to competitive tender. In addition, BNGPS works in partnership with the European Bank for Reconstruction and Development on projects in Eastern Europe such as the Project Management Unit at Kozloduy, Bulgaria. That unit is responsible for the design, program management and implementation of decommissioning strategies for nuclear facilities.
The acquisition of BNGPS by VT is scheduled to be completed in January for an initial consideration of GBP45 million ($90 million). There is also an earn-out based on the company's profitability for the year ending 31 March 2008, with an additional payment of up to GBP30 million ($60 million), giving a maximum total consideration of up to GBP75 million ($150 million).
VT said that BNGPS will complement its existing skills in critical services engineering and project management, and will further expand the group's support services capability in line with its strategy to develop activities in new support areas. VT Group chief executive Paul Lester said: "Project Services is highly regarded as a leading provider of nuclear decommissioning and waste treatment engineering services. The acquisition provides VT with entry to a new market where our core competencies in engineering services and the management of critical assets for Government customers are well suited."
Lester added: "The market for nuclear decommissioning in the UK alone is currently worth around GBP1 billion ($2 billion) per year, of which a significant part is available to Project Services. The business also has a significant presence in the homeland security sector where we are becoming increasingly active. We will help Project Services to complete the transition from public to private sector ownership and will ensure it applies strong commercial practices. The longer term growth prospects for the business are strong in the light of the anticipated nuclear new build programmes in the UK and other key territories."
BNFL Group chief executive Mike Parker said: "I am delighted that VT Group will be the new owners of Project Services as this achieves our objective of securing a good home for the business and, importantly, its people." He added, "The sale has generated additional value for our shareholder over and above the GBP8.3 billion ($16.7 billion) that BNFL has already returned to government."
The sale of BNGPS is the latest in the break up of BNFL. BNFL has already completed the sales of its US subsidiaries Westinghouse and BNG America, and of its UK subsidiary Reactor Sites Management Company (RSMC).
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