James Fisher & Sons PLC has announced the proposed sale of RMSpumptools Limited (RMS) to ChampionX UK Limited for a total enterprise value of £90 million. The net proceeds from the sale are expected to be approximately £83 million in cash, which will be used to reduce leverage and strengthen the Group's balance sheet. The disposal is in line with the company's strategy to simplify and focus its portfolio through the sale of non-core assets. While RMS is a leader in its markets, it operates in the oil and gas industry and has minimal synergies with the rest of the Group, not aligning strongly with James Fisher's strategy of focusing on maritime services to its core Energy, Defence, and Marine Transport markets.
The proposed disposal has been unanimously agreed by the board of directors of James Fisher to be in the best interests of the shareholders. It constitutes a Class 1 transaction for the purposes of the Listing Rules and therefore requires the approval of James Fisher's shareholders. The disposal is expected to complete early in H2 2024, subject to approval by James Fisher's shareholders, merger control clearance from the Saudi Arabian General Authority for Competition, and certain other conditions.
Jean Vernet, Chief Executive Officer of James Fisher, stated, "The sale of RMS marks a significant step in simplifying our portfolio to further strengthen our financial position and create a platform for sustained recovery. We believe the transaction represents good value for our shareholders, reflecting RMS's strong performance in recent years. The disposal allows James Fisher to continue its strategy of focusing and simplifying the Group, investing in the core portfolio and innovative new technologies that will deliver future growth."
The announcement also highlighted that the sale of RMS provides a great opportunity for ChampionX to build on RMS's success and for the colleagues at RMS to benefit from the focus that this change of ownership will bring. The proposed disposal is expected to support a reduction in leverage towards a target range of 1.0 to 1.5 times Net Debt to EBITDA, in line with the company's strategic objectives.
In conclusion, the proposed disposal of RMSpumptools Limited by James Fisher & Sons PLC is a strategic move to simplify and focus the company's portfolio, strengthen its financial position, and align with its long-term targets. The sale is expected to provide good value for the shareholders and support the company's strategy of investing in its core portfolio and innovative new technologies for future growth.