On October 1, 2001 Abbot Group plc completed the acquisition of Deutsche-Tiefbohr-Aktiengesellschaft ('Deutag') from Preussag Energie GmbH for a purchase price consideration of €90 million (£58.5 million), subject to a purchase price adjustment following the completion of a balance sheet audit, and the repayment of all inter-company debt due from Deutag to Preussag.
Abbot now announces that agreement has been reached with Preussag for a purchase price adjustment, through the completion accounts process, resulting in a reduction in the purchase price consideration of €26 million (€16.9 million) to €64 million (£41.6 million), to reflect the agreed value of the net assets of Deutag at the date of acquisition. This amount will be treated as a reduction in goodwill.
The settlement of the purchase price adjustment of €26 million (£16.9 million) will comprise an immediate cash payment of €13.2 million (£8.6 million) to Abbot which will be used to reduce debt, and the balance will be set off against amounts due to Preussag (and currently accounted for in the balance sheet of Abbot), being deferred equity consideration due by Abbot under the terms of the original acquisition agreement, repayment of the balance of the inter-company debt due by Deutag to Preussag at the date of completion and accrued interest thereon.
Abbot's Group Finance Director, Peter Milne, commented: 'This agreement with Preussag, which is the final stage in the acquisition process, will result in a significant reduction in our outstanding debt and further enhances the progress the group is making since the acquisition of Deutag in October 2001. Trading for the Group as a whole continues to be ahead of our expectations.'