13 August 2021

Sale of Frazer-Nash Consultancy

This announcement contains inside information

Babcock International Group (Babcock), the international aerospace, defence and security company, is pleased to announce that it has entered into a definitive agreement with KBR for the sale of its wholly owned subsidiary Frazer-Nash Consultancy Limited (Frazer-Nash Consultancy) for a cash consideration of £293 million (implying an enterprise value of £285m on a cash free/debt free basis), subject to routine closing adjustments and before transaction costs.

Headquartered in the UK, Frazer-Nash Consultancy delivers innovative engineering and technology solutions across a broad range of critical national infrastructure, helping to provide assurance to operators and regulators from a network of nine UK and four Australian locations. The consultancy, which has grown strongly since Babcock acquired it in 2007, employs around 900 people.

The sale forms part of Babcock's targeted disposal programme, which aims to generate at least £400 million of proceeds in the next twelve months. Frazer-Nash Consultancy is an outstanding business which provides independent advice to its customers and on that basis has operated largely independently from Babcock. Proceeds from this transaction will be used to reduce net debt.

Babcock CEO David Lockwood said:

"We are making real progress on our plan to streamline and focus the group on our key markets.  Divesting at least £400 million of businesses in our targeted disposals programme will enable us to reduce complexity and increase our focus as we return Babcock to strength. Frazer-Nash Consultancy is a good fit for KBR, and I wish them every success in growing the business further."

The consultancy is part of Babcock's Marine sector. For the year ended 31 March 2021 it reported total revenues of £100.5 million (year ended 31 March 2020: £101.9 million), profit before interest and tax of £13.5 million (year ended 31 March 2020 £17.1 million). As of 31 March 2021 gross assets were £79.9 million.

Completion of the agreement is subject to approval by the Australian foreign investment authority.

The agreement constitutes a class 2 transaction for the purposes of the UK Financial Conduct Authority's Listing Rules, and as such does not require Babcock shareholders' approval.

For further information, please contact:

The person responsible for arranging the release of this announcement on behalf of the company is Jack Borrett as Company Secretary.

Notes to Editors:

About Babcock International Group

Babcock is an international aerospace, defence and security company. We have a leading naval business, and provide value add services across a range of countries, including the UK, France, Canada, Australia and South Africa. We also operate in, and export to, additional markets. We focus on our core activities in the UK, using our capabilities to work on exports from the UK and to develop our international presence in our target countries.