19 July 2022

Babcock to sell part of its aerial emergency services business

Babcock International Group PLC (Babcock) is pleased to announce that it has entered into an agreement with funds managed by Ancala Partners, a mid-market infrastructure investor, for the sale of certain of its aerial emergency services businesses for a gross cash consideration of €136.2 million (which equates to around £115 million), subject to closing adjustments and before transaction costs.

These businesses provide aerial emergency medical services, firefighting and search & rescue to customers and communities in Italy, Spain, Portugal, Norway, Sweden and Finland. They employ over 2,400 highly trained employees and operate a fleet of 232 aircraft across 164 operational locations in the six countries. Babcock will retain its aerial emergency services businesses in its focus countries of the UK, France, Canada and Australia, where the Group also operates defence businesses.

The sale forms part of Babcock's portfolio alignment programme, designed to focus the Group and reduce complexity. Proceeds from the transaction will be retained for general corporate purposes.

Babcock CEO David Lockwood said: "The agreement marks another significant step forward in our strategy to align our portfolio. I would like to thank colleagues for their commitment and hard work in providing vital services for their customers, not least through the pandemic, and I wish them and Ancala every success for the future."

The businesses being sold are part of Babcock's Aviation sector. For the year ended 31 March 2021 they reported revenues of £407 million and a loss before tax of £177 million, including a £6 million contribution before allocated overheads, exceptional items and other one-off adjustments arising from the Contract Profitability and Balance Sheet review.

As of 31 March 2021, gross assets were £631 million (year ended 31 March 2020 £881 million), with net assets excluding cash of £156m and net lease liabilities of £230 million.

Based on unaudited figures for the year ended 2022, the businesses have recorded revenue of £405 million, and a loss before tax of £10 million (an operating profit contribution of c£13 million before allocated overheads). As of 31 March 2022, based on unaudited figures, gross assets were £635 million and net lease liabilities were £209 million.

Completion of the agreement is subject to certain regulatory and other conditions. The deal is expected to complete by the end of the calendar year, subject to the satisfaction of the relevant conditions.

Further information will be provided upon completion of the deal.

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Notes to Editors

About Babcock

Babcock is an international aerospace, defence and security company, with a leading naval business, providing value add services across a range of countries, including the UK, France, Canada, Australia and South Africa. We help customers in the UK and around the world to improve the capability, reliability and availability of their most critical assets.

About Ancala Partners

Ancala is an experienced and entrepreneurial investor in critical mid-market infrastructure. Founded in 2010 as an independent investment manager, Ancala adopts a unique approach combining differentiated investment sourcing with active asset management.

Ancala invests in a broad range of infrastructure sectors, focusing on assets which have downside protection and strong earnings visibility. With an emphasis on proprietary opportunities which have arisen from unique situations, Ancala leverages deep sector knowledge and operational capabilities, combined with a strong network developed through decades of operating in the European infrastructure market, across all its investments. This enables the firm to develop assets for the long term and deliver superior value to investors.

For more information, please visit www.ancala.com.