The sustainability consultancy AEA Technology has been acquired in a £18m cash deal after going into administration.
Ricardo UK, an engineering consultancy, announced it had acquired AEA’s business and operating assets in a ‘pre-pack’ administration deal. It said no historic pension liabilities or bank debts would be transferred under the deal.
Some 400 staff will transfer to Ricardo, which will operate under the banner ‘Ricardo-AEA’. The division will be headed up by Robert Bell, the former director of AEA, reporting to Martin Fausset, Ricardo MD.
The deal comes after several years of rising debt and pension liabilities at AEA, and a string of profit warnings.
As MRW reported, this summer the AEA’s finances were floundering. In early August, the company’s annual financial statement reported an overwhelming pension liability of £165.5m and an operating loss of £35.4m.
Despite a £5m bank loan from Lloyds Banking Group to ameliorate its position, and a statement released to say the AEA was trading under ‘business as usual’, by the end of August the company conceded that trading conditions remained challenging and it did not expect to receive any takeover offers.
Since then, the Financial Times has reported, AEA shares have generally traded below 1p, valuing the company’s equity at less than £1m.
Ricardo specialises in advising motor manufacturers on design, while AEA has been a leading technical adviser on waste to business and Government in the UK, having been spun out from the commercial arm of the UK Atomic Energy Authority in 1994.
A Ricardo-AEA statement said: “Ricardo and AEA are both extremely strong and highly respected businesses in their respective core markets.
“It is anticipated that Ricardo’s international network will allow AEA Europe to develop as a more global business, leveraging Ricardo’s industrial client base. In addition, AEA Europe’s strong links with government organizations are expected to enhance Ricardo’s relationships in this customer area.”
Ricardo CEO Dave Shemmans said: “The two businesses share a similar technology-focused professional culture, based on the delivery of innovative world class services to our customer base, utilizing highly skilled employees. Our common long term strategic drivers of reducing carbon emissions, maintaining air quality and the management of scarce resources provide an excellent opportunity to further develop Ricardo’s expertise in delivering high value-added services to our global customer base.”
Robert Bell, managing director of Ricardo-AEA, added: “I am extremely pleased that AEA Europe has become part of Ricardo. The transaction both secures the future for AEA Europe and provides a platform for its continued success and growth as a part of the global Ricardo organization.”