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Aspen Technology, Inc. announced the terms of a recommended all cash offer for the entire issued and to be issued share capital of KBC Advanced Technologies plc by ATI Global Optimisation LTD, a wholly owned subsidiary of AspenTech. Under the terms of the offer, KBC shareholders will receive 185p in cash for each share. The transaction values KBC at approximately £158 million, or approximately $230 million at the current exchange rate. Both companies' boards of directors unanimously support the transaction.
The transaction will be funded by cash on hand of approximately $91 million and committed financing. AspenTech plans to replace the committed financing with proceeds from a proposed $250 million revolving credit facility.
The proposed acquisition will be implemented by means of a scheme of arrangement under the UK Companies Act 2006 and is therefore subject to the approval of KBC shareholders and the High Court of Justice in England and Wales and to other terms and conditions as set out in the joint offer announcement released by AspenTech and KBC. This press release should be read in conjunction with such joint announcement, which is available at www.aspentech.com/corporate/press/press-releases.aspx . AspenTech has obtained irrevocable undertakings to vote or procure votes in favor of the scheme in respect of KBC shares representing approximately 42% of the issued share capital of KBC. It is expected that the transaction will close in the first calendar quarter of 2016.
KBC Overview
KBC is a leading provider of strategic consulting and software to the oil and gas industry, focused on operational excellence and profit improvement for oil refining, refinery-integrated petrochemicals and oil production assets. KBC has two main areas of business focus:
- KBC Consulting, which provides a unique combination of management and engineering consulting focused on operational excellence and profit improvement for refinery and refinery-integrated petrochemicals. KBC's consultants have deep domain expertise and extensive C-level customer relationships, which is expected to increase AspenTech's mindshare among these key decision makers.
- KBC Technology, which is comprised of a software portfolio of process unit reactor models and refinery-wide simulation software that is complementary to AspenTech's existing suite of solutions.
Strategic Rationale
AspenTech believes the strategic rationale for the proposed acquisition of KBC is compelling:
- Strengthens C-level relationships: KBC's world-class consulting services would enhance AspenTech's ability to serve as a trusted advisor to customers.
- Drives increased usage and adoption: KBC's highly differentiated consulting capabilities represent a unique opportunity for AspenTech to drive software adoption and increase client engagement, particularly in developing markets.
- Adds complementary software portfolio: KBC would add new and complementary technology, including in refinery operations and reactor modeling, enabling further innovation in refining as well as upstream markets.
- Accelerates asset optimization strategy: KBC would accelerate AspenTech's holistic asset optimization strategy, which is expected to generate significant value for AspenTech's customers through improved capital and operating efficiency.
- Consistent with capital allocation strategy: The acquisition of KBC is a measured use of AspenTech's financing capacity for strategic M&A, which is one of the components of AspenTech's capital allocation strategy.
J.P. Morgan is acting as exclusive financial advisor to AspenTech in connection with the acquisition and has committed to provide credit facilities to finance the acquisition. Evercore is acting as exclusive financial advisor to KBC in connection with the acquisition.
Keywords: Oil & Gas Industry, Process Unit Reactor Models, Refinery-Wide Simulation, Refinery Operations, Reactor Modeling, Asset Optimization, ARC Advisory Group.