14 May 2007

Interserve, the services, maintenance and building group, and its Qatari partner Al Darwish United Co WLL have agreed to acquire, for a cash consideration of £18.5 million, the Madina group ("Madina"), a Qatari industrial services business. As is the case with its existing associate businesses in Qatar, Interserve's share of the company will be 49 per cent, representing an investment of £9.1 million. The vendors are Mr Keith Harmer and his local co-shareholder.

Madina operates in two main fields: engineering fabrication and erection, and training. Its engineering activities focus on the design, fabrication and installation of pressure vessels, pipework, module construction and offshore equipment. This includes shot-blasting and painting capabilities and the provision of non-destructive testing and inspection services for the offshore and onshore oil, gas and petrochemical market. These high added-value, fabrication-shop-based activities complement the on-site and project-based nature of Interserve's existing Qatari operations.

In addition the company is the market leader in Qatar for the provision of recognised safety training across the fire, marine, health and safety, survival and offshore sectors, with its own extensive, world-class facilities including a helicopter splash pool. 

Founded in 1997, Madina has annual revenue of approximately £13 million, employs around 750 personnel and is one of the leading companies in its high-growth markets in Qatar, having established a high quality customer list including Maersk Oil Qatar, RasGas and Qatar Vinyl. The Qatari economy is forecast to grow by more than 30 per cent in real terms over the next four years at an annual rate of over 7 per cent*, with significant investment in liquefied natural gas and associated facilities anticipated to continue over an extended timescale.

Adrian Ringrose, Interserve Chief Executive, remarked, "The acquisition of Madina represents an exciting expansion of Interserve's overseas business. It is an excellent strategic fit, complementing our existing construction operations in Qatar and giving us greater access to this fast-growing market, in particular the petrochemical sector.  Madina is a strong business with great opportunities for organic growth in its own right, and we expect further benefits by leveraging our existing expertise, relationships and activities in the region."