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2001 Press Releases

Background to and reasons for the placing

In recent years Keller has strengthened its position as an international market leader in foundation services, through both bolt-on acquisitions and organic growth. In a highly fragmented market, acquisitions made have tended to be of small regional players and have traditionally been funded from the Group's cash flow and modest levels of bank debt.

More recently, the Company has expanded the range of the specialist services it provides to the construction industry, most notably through the acquisition of Suncoast Post-Tension Inc. ("Suncoast"). Suncoast, a leading designer, fabricator and distributor of post-tension cable systems in the US was acquired on 1 October 2001 for consideration of up to US$95 million in cash financed from new Group bank facilities.

Keller has also continued to take advantage of bolt-on acquisition opportunities in its core markets with the acquisition in November 2001 of Catoh Inc. for US$4.4 million (including acquired debt). Catoh is a regional market leader in specialty drilling, minipiles and earth retention in the Northeastern United States.

The net proceeds of the placing of £7.9 million will position the Company to continue to pursue similar sized bolt-on acquisitions whilst maintaining borrowing levels within the Board's internal limits.

Pre-closing trading update

On 12 November 2001 Keller announced recent contract wins of £135.7 million reflecting, in particular, a strong performance from the North American operations. This US performance has continued into the fourth quarter, underpinned by continuing high levels of spending on infrastructure projects.

This success in contract wins has maintained the value of the Group's order book, which typically provides three months visibility, at around £150 million since the half year. This level is some 25 per cent. ahead of the same period last year on a like-for-like basis. In addition, the Suncoast acquisition is trading in line with expectations.

The Board therefore expects to report good results for the current year and can also look forward to a strong start to 2002.

Details of the placing

The cash placing is conditional on the admission of the new ordinary shares by the UK Listing Authority and their admission to trading on the London Stock Exchange, for which application is being made. Dealings in the new ordinary shares, which will rank pari passu in all respects with the Group's existing ordinary shares, are expected to commence on Friday 14 December 2001.

DrKW has entered into a placing agreement with the Company whereby DrKW has agreed subject to the conditions set out therein to use its reasonable endeavours as agent of the Company to procure placees to subscribe for the Placing Shares.

Commenting on the cash placing, Tom Dobson, Chief Executive Officer, said:

"In recent years Keller has successfully demonstrated its ability to source, execute and integrate acquisitions which has been an important driver of shareholder value, alongside the Group's organic growth. The placing facilitates further acquisitions which will enable Keller to continue to strengthen its position in its core markets ".

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