DCSIMG

Babcock seals £920m deal to buy Bond chopper firm

Avincis paid 300m for Bond Air Service and Bond Offshore Helicopters in 2011. Picture: Contributed

Avincis paid 300m for Bond Air Service and Bond Offshore Helicopters in 2011. Picture: Contributed

  • by GARETH MACKIE
 

Engineering services group Babcock International has struck a £920 million deal to buy search and rescue helicopter operator Avincis, owner of Aberdeen-based Bond Offshore.

The acquisition comes with £705m of net debt and potential damages claims related to the Glasgow pub accident in November, in which a Police Scotland helicopter leased from Bond crashed into the Clutha bar, killing ten people.

Subject to shareholder approval, the deal will be funded through a £1.1 billion rights issue. The cash call, which is fully underwritten, will see Babcock investors offered five shares at 790p each for every 13 they already hold.

Speculation emerged last month that Avincis, which last year entered talks to create a joint venture with Babcock, had invited banks to pitch for an initial public offering that could value it at up to £2bn.

But Babcock chief executive Peter Rogers said the helicopter operator was a “clear strategic fit” for the group, which owns the Rosyth dockyard and manages the Clyde naval base.

He added: “Avincis already has a strong growth platform and its combination with Babcock will generate even greater expansion opportunities and value creation for Babcock’s shareholders.”

Avincis, which is owned by private equity outfit Kohlberg Kravis Roberts and Italian group Investindustrial, bought Bond Air Service and Bond Offshore Helicopters from brothers Peter and Stephen Bond in 2011 for a combined £300m.

The firm’s chief executive, James Drummond, said: “Babcock is a great strategic and cultural fit for Avincis.

“We provide vital, complex and life-saving services for our customers, and both share a commitment to operational excellence and the highest standards of safety.

“Avincis’s global business has grown significantly over the past few years, and joining forces with Babcock will allow the strengthened group to access new markets and customers, and build on an already impressive order intake.”

The London-based company employs more than 2,800 people, including 1,000 engineers and technicians.

In the year to December, it made an adjusted underlying profit of €135m (£112m), on revenues of €582m.

In today’s acquisition announcement, Babcock highlighted a number of issues facing Avincis, including the ongoing Air Accident Investigation Branch probe into the Clutha crash.

It added: “Bond has received several intimations of civil claims for compensation for personal injury and property damage from solicitors acting for people impacted by the accident, including, without limitation, a potential employers’ liability claim in respect of the Bond Air Services pilot who died in the accident.”

The group also warned of a “lengthy period of uncertainty” if Scotland become independent, with the potential for an “adverse” impact on its businesses north of the Border.

“There may also be a medium term knock-on effect on the nature, timing and scope of the policies and procurement plans of the successor British state, especially in defence terms,” it said.

 

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