Serco Group has signed an agreement to buy the remaining 50 percent equity stake in Australian nautical defense firm DMS Maritime Pty Ltd. from its joint venture partner P&O Maritime Services for $108 million in cash.
According to The Wall Street Journal, DMS Maritime is expected to have net debt of around $40 million on completion, which means the total valuation of the business will be $256 million.
DMS Maritime reported total assets of $67 million on Dec. 31, 2011. Its expected revenue for the year is $128 million with an underlying operating profit of $19 million.
According to the Ian Walker article, Serco’s existing debt facilities will fund the purchase.
Serco will include within its order book the additional 50% it now owns of DMS Maritime’s £500 million order book.
The transaction is expected to be accretive to earnings in the first full year following completion.
Shares closed Tuesday at $8.53, valuing the company at $4.57 billion.