Layne Christensen Announces Definitive Agreement to Sell Geoconstruction Business
May 20 2015 - 6:00PM
Layne Christensen Company (Nasdaq:LAYN)
("Layne" or the "Company") today announced that it
has signed a definitive agreement to sell its Geoconstruction
business segment to a subsidiary of Keller Foundations, LLC, a
member of Keller Group plc ("Keller").
The transaction, which is expected to close in the next 45 days,
is subject to certain customary terms and closing conditions,
including approval by the U.S. Army Corps of Engineers to transfer
the East Branch Dam contract to Keller. The purchase price for
the Geoconstruction business segment will be approximately $34.5
million, plus the value of the business segment's working capital
at closing, currently estimated to be $5
million. Approximately $2.5 million of the purchase price will
be held in escrow at closing. In addition, Layne will share in
the profit or loss for one of the contracts being assumed by
Keller, which could increase the purchase price by up to $5
million, or decrease it by up to $1.5 million. Layne expects
to use the net proceeds from the sale for general corporate
purposes and to pursue selective growth opportunities in its core
businesses.
Commenting on the transaction, Layne's President and CEO Michael
J. Caliel, said, "The sale of Geoconstruction is consistent with
our developing strategy to reshape our operating portfolio and
concentrate on Layne's core competencies. Geoconstruction has
earned a reputation as a premier provider of specialized
geotechnical foundation construction services. We are
confident that this business will continue to prosper as part of
Keller."
Stinson Leonard Street LLP acted as exclusive legal advisor, and
Jefferies LLC acted as exclusive financial advisor to Layne on this
transaction.
Layne Christensen Company
Layne is a global water management, construction and drilling
company, providing responsible solutions to the world of essential
natural resources — water, mineral and energy. We offer
innovative, sustainable products and services with an enduring
commitment to safety, excellence, and integrity.
Forward-Looking Statements
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. Our actual results and performance may
materially and adversely differ from those contemplated by the
forward-looking statements in this press release for many reasons,
many of which are beyond our control, including, but not limited
to, assumptions regarding the markets in which we operate, the
ability to obtain all of the consents and approvals and satisfy all
of the other closing conditions to the sale of the Geoconstruction
business segment, the results for the assumed contract for which we
are sharing in the profit or loss, changes in the working capital
of the Geoconstruction business segment prior to the closing of the
definitive purchase agreement and the ability of Layne to execute
on its business strategy. In addition, our business in general is
subject to certain risks, uncertainties and assumptions, including,
but not limited to, the following: unanticipated slowdowns in
the Company's major markets; the availability of credit; the risks
and uncertainties normally incident to the construction industry;
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 to be incorrect, actual results
may vary materially and adversely from those anticipated, estimated
or projected. Please read the risk factors described in
detail in the Company's Annual Report on Form 10-K as filed with
the U.S. Securities and Exchange Commission on April 14, 2015 for
additional information regarding these risks. These
forward-looking statements are made as of the date of this press
release, and except as may be required by law, 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.
CONTACT: Layne Christensen Company
Michael J. Caliel
President & CEO
281-475-2690
michael.caliel@layne.com
Andy Atchison
Chief Financial Officer
281-475-2670
andy.atchison@layne.com
The Equity Group Inc.
Devin Sullivan
Senior Vice President
212-836-9608
dsullivan@equityny.com
Kalle Ahl
Senior Associate
212-836-9614
kahl@equityny.com
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