LONDON, UK: Admiral Acquisition Limited (LSE: ADMR) has entered into a definitive agreement with ASP Acuren Investco LP, an affiliate of funds managed by American Securities LLC, to acquire 100% of ASP Acuren Holdings Inc., the ultimate parent company of Acuren, a leading North American provider of critical asset integrity services, from American Securities, in a transaction valued at approximately $1.85 billion, reflecting approximately 9.7x 2024E Estimated Adjusted EBITDA of approximately $190 million.
Acuren provides mission critical, regulatorily-mandated, non-destructive testing, inspection, engineering and lab testing services across a variety of industrial end markets.
The Transaction combines Acuren’s market leading test, inspection and services platform in North America led by a management team with a history of supporting transformational organic and inorganic growth and driving value creation for equity investors with the expertise of Admiral’s founders, led by Sir Martin E. Franklin, who have a track record of value creation in the public markets, most recently via J2 Acquisition Ltd (LSE: JTWO), which acquired APi (NYSE: APG) in 2019.
Robert A.E. Franklin, co-founder of Admiral commented, “The Admiral team was immediately impressed by Acuren’s leading position in the North American critical asset services market, track record of organic and inorganic growth, culture of leadership and commitment to safety. We are excited about the opportunity to partner with Tal and the Acuren team. Acuren aligns with Admiral’s investment criteria of market leadership in its niche market, a strong management team and attractive free cash flow dynamics. We believe Acuren can be the foundation of a world class publicly listed testing, inspection, certification and compliance company.”
Talman Pizzey, CEO of Acuren commented, “American Securities has been a great partner to Acuren. We’re looking forward to working with the Admiral team to support Acuren’s next phase of growth as a public company. The Admiral team’s successful track record of driving value creation for shareholders while providing great jobs for employees, across diverse businesses, particularly industrial services, is well aligned with our long term growth objectives. Our commitment to providing best-in-class services to our clients remains unwavering.”
The purchase consideration payable in connection with the Transaction will be funded from a combination of: (i) Admiral’s existing cash of approximately $560 million; (ii) additional equity proceeds of approximately $312 million for which Admiral has received equity commitments to purchase ordinary shares of Admiral at $10.00 per ordinary share from a limited group of institutional shareholders, which commitments are conditional upon the closing of the transaction; (iii) committed loan facilities consisting of a $1.06 billion term loan and a $75 million revolving credit facility; and (iv) approximately $77.5 million in commitments to exercise warrants for ordinary shares at a price of $10.00 per ordinary share as part of a wider warrant financing, to raise up to an aggregate of approximately $138 million in proceeds, conditional on Closing.
Any additional funds will be used to pay transaction fees and expenses of approximately $65 million and for working capital for the combined company.
Between signing and Closing, Admiral will launch a private placement of ordinary shares to raise up to an additional $300 million.
The Board of Directors of Admiral unanimously approved the proposed Transaction. Closing, which is expected to take place in early Q3 2024, is subject to customary conditions.
Upon Closing, the Company will be merged with a newly-formed U.S. subsidiary of Admiral with the Company surviving the merger as a wholly-owned subsidiary of Admiral.
Jefferies acted as lead financial advisor and lead capital markets advisor, and has committed to provide debt financing and will act as lead placement agent to Admiral. UBS Investment Bank acted as financial advisor and Greenberg Traurig LLP acted as legal advisor to Admiral on the Transaction. Latham & Watkins LLP acted as legal advisor to Jefferies. Baird and Harris Williams LLC acted as financial advisors and Weil, Gotshal & Manges LLP acted as legal advisor to Acuren and American Securities.
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