James Fisher divestitures gather pace as marine engineering group sells loss-making nuclear services division to private equity firm for just £3
- JFN sold for £3 to Myneration, an Rcapital Partners investment vehicle
- Myneration to provide £3m secured revolving credit facility to fund growth
- James Fisher expects 2022 operating profit to be “in line” with 2021
James Fisher & Sons has sold its loss-making nuclear decommissioning services division, JFN, to a UK private equity firm for nominal consideration of just £3.
The deal is the latest of several recent divestitures as the London-listed marine engineering group seeks to repay its debts after a difficult few years.
Myneration, an investment vehicle managed by private equity firm Rcapital Partners, will acquire JFN and provide a £3m secured revolving credit facility to fund the company’s growth going forward.
James Fisher’s JFN division will post an operating loss for 2022
James Fisher Chief Executive Jean Vernet said: “The sale of JFN is a further step in the implementation of our strategy of streamlining and concentrating the portfolio and, taken together, the divestments of businesses and assets made over the past three months are important steps in streamlining the Group’s operations and strengthening the balance sheet.
“JFN has valuable and unique capabilities and requires the right investment to exploit the market opportunities available to it.
“We are delighted to have found in Rcapital the ideal owner for the next chapter in the development of this business.”
In December, the group sold four activities, including its Swordfish maritime services vessel to the Indian Seamec.
The sale of Prolec, Mimic and Strainstall brought James Fisher a total of around £18.4m, while he received £20m for Swordfish in January, he confirmed today. today.
Peel Hunt analysts said the latest divestment was “sound” and should help boost the group’s profits.
James Fisher expects to report revenue from continuing operations of around £475m for 2022, up from £442.4m in 2021, and operating profit in line with 2021.
JFN will be presented as a discontinued operation and will show an operating loss.
Analysts at Peel Hunt noted that no significant new contracts were announced in the second half of the year for JFN, with trading within the division not expected to improve quickly.
“We maintain our Hold rating and 400p TP, but are confident in the quality of the market-leading group core operations,” they said.
“We expect an upgrade as soon as trading improves or if there is further weakness in stocks.”
Josie Richardson, chief investment officer at Rcapital, said the fund would support the company “as it enters a new phase of growth and development”.
‘JFN plays a crucial role in the UK’s nuclear decommissioning industry and therefore in delivering the government’s strategic energy plan,’ she said.
“Its management team, market-leading technical services and unique UK-based experience in specialist areas put it in a strong position.”
James Fisher said he has historically granted a number of parent company guarantees to JFN, which will remain in place.
Shortly after the deal closes, an unsecured £1.2m loan to JFN will be repaid to James Fisher, who will in turn provide the divested business with a secured term loan bearing interest of up to £3.5 million.
Shares of James Fisher fell 5.2% to 370p in morning trading on Monday. They have lost about 20% of their value over the past year.