Professional infrastructure and environmental services firm Cardno Limited announced it had completed the sale of Cardno ATC to a group led by Bernhard Capital Partners for a total consideration of AU$89.1 million, the proceeds of which will be received by the end of November 2015.
This transaction demonstrates the company’s commitment to promptly implement its Strategic Review, introduced in October by CEO and Managing Director Richard Wankmuller. The net proceeds of the sale will be used to reduce the company’s debt and over time provide the company with more financial flexibility.
“This sale allows us to expedite the completion of our integration activities in the Americas and to turn our focus to new growth opportunities and expanding our service offerings across our global markets,” Mr Wankmuller said. “It also reinforces our determination to efficiently and effectively carry out actions noted in the Strategic Review, especially those aimed at underpinning a significant performance improvement in the second half of FY16.”
A portion of the corporate overhead costs associated with Cardno ATC will be transferred with the sale, the remainder of which are currently under review as part of the Strategic Review’s cost reduction plan. The sale is expected to have a relatively neutral impact on the earnings for FY16.
ATC Associates was acquired by Cardno in March 2012 for a purchase price of AU$98 (US$106) million. It has more than 70 offices across the United States and employs about 1,350 staff around the country. It provides environmental and testing services, building sciences, geotechnical engineering and construction materials testing (CMT).
“ATC is a lower margin business than the rest of Cardno’s US operations and does not operate in a service area that we are targeting for growth. We believe Bernhard Capital is a better fit for ATC’s business and will provide a good opportunity for the employees,” Mr Wankmuller said.
Cardno Chairman John Marlay said “This outcome demonstrates how the management team is moving quickly to implement the Strategic Review. We are pleased with this result”.