Sydney, Feb 26, 2008 AEST (ABN Newswire) - SAI Global Limited (ASX: SAI) today announced that its Assurance strategy had been given a major boost with the Canadian Standards Association choosing SAI as acquirer of the prestigious Quality Management Institute ("QMI"), the leading Auditing and Certification Body (or Registrar) in Canada and the United States. An Asset Purchase Agreement has been signed and financial completion is scheduled for 29 February 2008, subject to customary closing conditions.
According to SAI's chief executive, Mr Tony Scotton: "This transaction delivers on the Company's strategy to build a truly global Assurance business. SAI will have the largest market share in the United States, Canada, Australia and Mexico, and significant footprints in Europe and Asia."
QMI President, Ms Wendy Tilford, said: "We recognised that the time was right for QMI to join forces with a global player, and have been pleased by the level of interest the sale has generated". She added: "We chose SAI because we see this as the best fit in terms of company origins, culture, shared vision and QMI's positioning within the expanded enterprise. My colleagues and I are delighted to be joining the SAI team and looking forward to further expanding the geographic reach and combined product offering".
The acquisition provides the following benefits to SAI:
- Establishes SAI as the market leader in the key North American Assurance market
- Is a significant step in becoming one of the major providers of Assurance services in a market which is showing increasing signs of consolidation
- Facilitates the rationalisation of SAI's existing North American Assurance and Professional Services operations
- Further increases the proportion of annuity style income across the group
In paying CD$40M in cash for the business, funded by new borrowings, Mr Scotton, said: "QMI has annual revenues of CD$30M, and the price paid reflects the strategic importance of these assets. Like other companies we have acquired in the Assurance space, the current profitability is below that achieved by SAI's existing Assurance assets but we have demonstrated our ability to grow margins in these businesses over a relatively short period.
The acquisition of QMI is the catalyst for restructuring the North American Assurance and training operations, providing further opportunity for margin expansion".
On the financial impact on SAI, Mr Scotton commented that: "There is unlikely to be a significant impact on reported net profit after tax before restructuring charges for the period ended 30 June 2008, but net profit after restructuring charges is expected to be around A$800k lower than recent guidance. We expect the impact of QMI and the restructuring of the North American Assurance and Professional Services operations to add at least A$6.6M to EBITDA and a 1.2 cents to earnings per share in FY09".
Headquartered in Toronto, Canada, and established in 1984, QMI's 400 professional auditors have issued thousands of certificates in North America and overseas to national and international management system standards such as the International Organization for Standardization (ISO) 9000 quality management standards and ISO 14000 environmental management standards. QMI also registers companies to various food, health care, forestry and aerospace standards.
Contact
Mr Tony Scotton
Chief Executive Officer
SAI Global Limited
Tel: +61 2 8206 6182
Mobile: +61 2 419 527 592
Email: tony.scotton@saiglobal.com
Mr Geoff Richardson
Chief Financial Officer
SAI Global Limited
Tel: +61 2 8206 6805
Mobile: +61 429 314 698
Email: geoff.richardson@saiglobal.com
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