Good morning, everyone. It's Stuart Ford from CIRCO speaking, and thank you for joining the call. Just before we start proceedings, let me remind you that there are forward looking statements that may be made during this call. These are based on information that is currently available are subject to change due to a variety of factors. For more detail and the full disclaimer, including restrictions on participation in the placing, Please refer to our stock exchange announcements as well as to Slides 2 and to Slides 3 in the presentation pack.
With that, let me hand over to Rupert.
Okay. Good morning, everybody. We want to talk to you this morning about our acquisition of the Naval Systems business unit of Allian. This is a business that has world class capability in ship and submarine design production engineering and in service support and it complements CIRCO's existing U. S.
Navy shipboard and shore based modernization installation and systems integration, a business. Just to give you a bit of background to this, as you know, over the last 5 years, we've been going through a process of stabilizing the business, transforming it and now we are in a growth phase and we expect profits between 17 19 to grow by a CAGR of 20% and for our free cash flow to turn positive this year. For some years now, we have been looking at the US Navy as a target for investment. We already do $300,000,000 of revenue with them and we've been doing business with them for over 30 years. And we do overall $453,000,000 of revenue in defense in the U.
S. The consideration is $225,000,000 on a cash free debt free basis It's going to be financed by an equity facing that we expect to raise a gross around 1,000,000 together with a new committed debt facility of up to 1,000,000. The acquisition is expected to contribute in 20.20 revenue of approximately 3 $70,000,000 and EBITDA of $28,000,000 and UTP of $27,000,000 after $3,000,000 to $4,000,000 of synergies. The implied multiples of 0.68.1 and 8.3 times respectively and we expect it to give us underlying EPS accretion beyond the current consensus forecast for 2020 of between 7% 9%. The financing structure being part debt, part equity plus 2 things.
First of all, it enables us to keep a balance sheet that is well within our comfort level of 1 to 2 times. We expect pro form a 1.5 times but it also enables us to retain some capacity to do acquisitions of if we believe them to be appropriate. Going over to the next slide, Slide 5, I want to talk a little bit about why this market the U. S. Navy is so attractive for us.
It is because the U. S. Navy plans to embark on one of the largest fleet expansions ever seen. It's going to increase the fleet from 280 ships to 330 3555 by 2000 and 34 and that number has been significantly increased this year and is backed up by the plans that they have submitted to Congress. The goal of a 355 ship navy cannot be achieved merely by building new ships They have also got to extend the life of their existing platforms.
And just to name 2 the Alie Burke Eegis Air Defense missile destroyers of which there are 66 in the U. S. Navy to have a class life extended between 5 10 years and the Los Angeles class subs from 33 years to 43 And with these life extensions comes a great deal of upgrading and modernizing the existing platforms. Why are they doing it? If we go to slide 6, it is simply this is that the Chinese in particular have been vastly and rapidly expanding their own Navy to have worldwide reach over the last decade, they have built over 100 ships and submarines and they now have a navy that is larger than the US with over 3 17 warships and submarines and this is something that the U.
S. Which has had dominance of ceasefire around the world is looking to correct. And also at the bottom left of that call and according to the photograph, you will see an accrual car submarine from the Russians, which is they are now much more active. Moving on to slide 7. What does the NSP you do?
Well, the it has world class naval systems engineering and design capability. It has some thousand people involved in every major U. S. Navy ship class. If I can just draw a picture for you of the life of a ship class in the U.
S. It starts with an outline specification from the Navy and the customer that says that they would like a ship with these characteristics say 8 to 10,000 tons displacement a certain level of armaments and range and number of people. That then needs to be translated into a detailed specification of many thousands of pages long and a drawing package, which is then handed over to the shipyards to quote for a build. And SBU can do that work for the US Navy, the vessel and systems design and engineering work and they do it not only for ships, they do it for submarines and they also and excitedly do it for unmanned underwater vehicles. Those are underwater drones which are seen by many as being a fundamental game changer in the world of Naval Warfare.
Having made these design packages, it then gets handed over to the shipyards to build and the Navy then needs a as it were a buyer's representative and this is a role that the gain in SBU performs. They are in the shipyards. They're quoting over ships. They're supervising the work as it's done. They're doing all the testing and the set application as the ship or submarine is built.
It then goes out to sea trials and testing. And again that they monitor those and report on those and they do the regulatory body coordination and certification. Finally, when the ship goes into service, they then go and provide in life and life cycle support, which is typically around modification and upgrades and interestingly for every dollar that the U. S. Navy spends on building the ship they spend $2.3 going and maintaining its upgrading and sustaining its capability through its life.
How does this fit with Circos business? Circos has a large U. S. And Navy business, as I said, about revenues about $300,000,000 But if you imagine that if Allian, sorry, if NSPU do the design and the engineering around modifications and upgrades and new fits when the actual ship comes into port in circle who go onboard the ship and go and do the rewiring, the re cabling, they do that. They take the old equipment off.
They install the new equipment. They do the integration onboard ship. And it's the integration of these 2 capabilities. On the one hand, the shipboard and shore based modification design, which is highly skilled that is a manual task on each individual ship and the design and engineering capability of NS BU that we think is going to be attractive. It's also going to make us a top tier player to the U.
S. Navy, income, as I said, both engineering and installation capability. Moving over to slide 8, our business the Sarko business in the U. S. At the moment doesn't act in the defense business only has a very thin order book as it tends to be made up of task orders.
So there's framework contracts for doing ship modification. And when the ship comes in, we get issued with a task order to go and do it. The contracts for the design and engineering tend to work differently they work on a 5 year cycle. So a business will be given a contract to provide engineering support services for a 5 year period over the life of a ship class which might as we said be 40 years. So there might be 7 or 8 times during the life of the class that these will be let So they actually have an order book there.
We've got an order book about 2 years' worth of revenue about $600,000,000,000 and a new business pipeline of $2,000,000,000 The key customers are the U. S. Navy, the U. S. Army, Coast Guard and the Royal Canadian Navy, but they also do a small amount of business in other territory as well.
Listed there on the slide are the top 7 contracts and you'll see halfway down the amphibious warfare program, which is for amphibious assault fleets, the team submarine that handles the Los Angeles class, Virginia class submarines. The DDG 51 which is the easiest class destroys and below that LCU 2000 which is the landing craft for the army where they have a contract to go and upgrade. The landing craft that belong to the U. S. Army.
The JSS joint ship services that's a contract with the Roll Canadian Navy to provide a design and sustainment services for support vessels. If you go then on to the next side, the strategic fit and rationale, this acquisition is an important one for our business. It adds scale to the U. S. Defense business increases by about 70%.
But it also adds scale to our overall a defense business around the world. It adds capability. It adds world class ship engineering design and sustainment capability, which we think is going to be very important. It gives us access to cost synergies through overhead recovery on fixed price contracts. And the way broadly speaking that works is that we believe that we can we are this is a carbide we will be taking the operational uh-uh people from this business and leaving behind the HR and IT and support services and integration days into what is a pretty highly efficient central services operation in Circko in North America and that will generate savings of about 17,000,000 dollars a year on the overhead structure.
Most of those savings will get recycled through to being able to provide lower pricing to the cost plus contracts. 80 percent of the revenue in this business is cost plus. So we will be able to provide lower rates to our customers which should make us more competitive, but we expect to get $3,000,000 to $4,000,000 of cost advantage in a better overhead recoveries on fixed price contracts and the cost of the Sarko business as a whole is about 50% of the businesses fixed price. So we expect to get synergies of $3,000,000 to at the top table in what is a very important and growing looks like a sustainably growing market in the U. S.
Navy. But also an opportunity none of which has been costed in or modeled into our acquisition models to deploy these skills to markets where we are already present specifically in the UK and Australia where we have good Maritime businesses. And we also have a note nascent defense business in Canada. In terms of people, there are about 1000 of them. They are a long 10 year.
People over 30% with more than 10 years experience 65% with more than 3 years experience They cut the culturally we feel that this is going to be a good fit. These are people, many of whom have a sub in the Navy themselves which is similar to our personnel, a lot of them have served in the flag in the U. S. Themselves, the senior management team and all the operational staff are going to transfer to and we will be making appropriate arrangements around transition and retention. Moving on to the next slide, slide 10 strategic fit and rationale improving the mix of our business is going to take our U.
S. Business from 20% 26% of the business. That'll be we'll give it revenues of about 1,200,000,000 a year And in terms of our defense business, sorry, $1,200,000,000 a year, the U. S. Business will be.
In terms of our defense business, it's going to go from 30% to 35% of our revenues with revenues of about 1,000,000,000 worldwide. At which point I'm going to hand over to Angus.
Thanks, Richard. Slide 11, in terms of financial performance the last reported financial year for Allian was the year ended 30th September 2018. Revenue was 336 $1,000,000 for an SBU. And we expect that to grow to $370,000,000. In 2020, our 1st full year of ownership to 31 December 20.
This forecast growth of chunk of it's already contracted in the order book. And on a stand alone basis, we expect to be able to grow this business at 5% compound. However, we do see revenue synergy potential. We can sell into the platform that they have. They can sell into our platform the states.
And we also see potential in the longer term for the U. K. And Australia. None of these revenue synergies have been built into the model. Of underlying trading profit, for the year ended 30 September 'eighteen, they were 1,000,000, about 1,000,000, By FY 2020, we expect that to grow to 1,000,000 or 1,000,000.
So that includes, as Rupert said, $3,000,000 to $4,000,000 from the cost efficiencies and the rest of it, largely being the flow through from the revenue increase. In terms of margin, 6% has been around the margin that NSPU is a achieved in previous years. And we see the potential to expand that through operational leverage, mix and efficiency. And so we would see somewhere about 7% in 2020. From a risk perspective with accounting, this is given the fact that 82% of this us is cost plus.
Like we have in the U. S, where we have a team of government auditors, occupy part of our office and spend their whole year auditing our costs. They've got exactly the same. And, so from that perspective, they're up to date and they seem to be very, very clean. We also at Ernst And Young come in and do a full financial due diligence, on the business.
And nothing material coming out of either of these. The net finance costs we expect to increase by 2 1,000,000, which reflects the increase in net debt. And then the effect of IFRS team, we're working through, which we think UTP will probably benefit by about GBP 700,000, which is part of the guidance for 2020. And net financial costs will go up by about 1,000,000. But these numbers will confirm once we get the details of all the leases.
In terms of tax rate, 21% federal, 4% state, We think this will then have a significant goodwill, amortization adjustment. So probably tax rate on this about a somewhere between 10% 15% going forward. In terms of earnings accretion, we expect that to be 7% to 9% in 2020, our first full year of ownership. That includes that's with the acquisition increasing profit after tax by about $15,000,000 to get from the $20,000,000 of trading profit down to the $15,000,000, you know, broadly $2,500,000 of net finance costs 1,000,000 of tax. The equity placing will increase the fully diluted share count for EPS purposes from 1,145,000,000 to somewhere about 1,000,000 The current analyst UPAq underlying profit after tax consensus for FY20 is about 1,000,000 and the underlying EPS consensus is about £7..1.
So the acquisition adds a growing revenue base for us at good margins accretive to the group average and we believe with potential for future enhancement. Combined with the transaction funding, it results in a 1st year result, which will be purely accretive to earnings. Flicking on to Slide 12. The cost of NSBU is $225,000,000, on a cash free debt free basis. And that's going to be financed by the combination of equity placing.
That is this morning, expected to raise gross proceeds somewhere around $130,000,000 together with a new committed debt facility of up 1,000,000. The equity placing is for cash up to 111,200,000 shares representing up to 100% of the existing share capital. A new committed 3 year term loan of 75 1,000,000. We're really pleased to have a big got this. As you're all aware and we've talked about, the challenge of getting the refi done in Q4 was significant.
And the fact that 4 banks have been willing to step up to support us in the acquisition, like, demonstrates where we are, in fact, that we're moving through, our previous woes and very much now into the growth phase of the strategy. And the other thing is that on a fully drawn basis, this new debt is only 5 basis points more expensive than our previous debt. So the interest costs somewhere $2,000,000 to $3,000,000 depending on the leverage. Our net debt guidance, as you're aware, was 2 $100,000,000 for the end of 2019 with the acquisition, that'll increase to somewhere around $250,000,000 The leverage, guidance wise, was 1.3 times net debt EBITDA, and we're moving now to about 1.5 times at the end of 2019. Midway in our range between 1 and 2 times.
As you'd expect, there's certain regulatory approvals we have to get, so we're going to get Hart Scott Rodido in terms of competition. And then CFIUS, which is the Committee And Foreign investments into the United States. Now we got this recently for our BTP acquisition, so we we see no reasons why we won't get it, but it will take a number of months. So it's very hard to project when this will close our belief is it will be during the second half. And the equity placing is not conditional in the completion of the acquisition.
That will be done this morning. So financing acquisition through this mix of debt and equity allows us to maintain the strong balance sheet, leverage right in the middle of our 1 to 2 times target range and delivering a transaction that Rupert describes as, you know, is strategically compelling, but also financially attractive Rupert.
And so in summary, As Angus says, this is a strategically compelling acquisition. It's an important acquisition for us. It moves the dial The U. S. Navy is one of the most attractive segments of our portfolio combining long term sustainable growth with balanced risk and reward.
It's a very good fit for our business but culturally and in terms of what we are positioned with the customer. It's a significant step up in our engineering capability across the business and it's got opportunities for upside across the Circays international footprint and it improves our sector and geographic mix of the business. Structure is prudent and leaves us with a sensible level of net debt to EBITDA and also some some dry powder if we need it whilst producing very attractive financial returns. On which basis we will hand over to Q And A and I think we'll take Q And A from the phones first and then will take questions from the typed into the webcast as they come in. So questions from the phone, please.
Thank you. The first question is coming from the line of Rory McKenzie. Please go ahead.
Good morning all and 2 from me please. And firstly, on the contracting, I guess these kind of contracts are typically kind of 5 years or longer. Does the only 2 years' worth of revenue in the order book? I mean, there are some rebids coming up quite soon. And is that why you're assuming that the $17,000,000 of synergies I guess, kind of reinvest in price for this client?
And then secondly, on the overlap of activities, it doesn't sound that there's much overlap with what you do today. Can you talk about how the new size and breadth of Circa U. S. Defense will change how you go to market and your kind of future ambitions in the wider defense industry Thank you.
So if I can just talk about the order book, actually to have a buy an order book of just over 2 year well around 2 years worth is I think that would be about normal there is what you would expect. There's about probably about a quarter of the a current book of contracts which are up for rebid in any one We don't see anything unusual in that. And we would just note that over the last 5 years, they've had a win rate of about 90% on renewals. In terms of our of that approach to the customer. There are essentially 2 buying agencies for the U.
S. Navy. There's Navsea which does the platforms that's the hulls, the propulsion, the gets you a ship that floats and goes to sea and the spare war which purchases all the sensors, the weapon systems everything that makes the ship a fighting entity. We have a very strong circle existing has a very strong position with Spaewar. We do a lot of prime contracting work for them.
And NSPU have a very strong position with NABC. Now eventually they all come up to be part of U. S. And maybe. The other thing that is attractive from this point of view is that a lot of naval work is proteered locally and NSPU are present in shipyards where we are not present in on the East Coast.
We are very present in the really big ones like north of Virginia and over in San Diego but they are also present in other places which will give us extra reach for our business. So there's actually a little overlap in customer capabilities. The more complementary than anything else. I think that it's when you get up to U. S.
Navy up in the Pentagon that the ability to be able to offer both is going to be appreciated There is also a very specific thing is that the Navy is a very, I would say prudent buyer. They they are not willing to give contracts for people who have not done this sort of work before. And we in the circle current circle business have something sort of hit a glass ceiling because we can do all the installation work but we bid several times for large contracts that have a greater degree of engineering work and we whilst we've been very competitive on price, the Navy has not bought from us basis, we don't have the engineering capability. Now we have that engineering capability. We think that it allows us to re up into what might you might call middle ground between the NSPU area and the current circle a business.
Does that answer that first part of the question?
Yes, that's very helpful.
Clearly we will be reaching out in the next 24 hours to, to senior authorities in the Navy based in the UK and Australia to bring them the welcome news that one of the largest contractors now has a significant world class design and engineering capability based out of the probably the most advanced navy in the world and we think that that might be attractive to them. We haven't priced it in these things will take a long time. But I think it is going to be seen by them as a useful and important move within that supply chain.
Yes, that's very helpful. May I just want to follow-up, is there any history of kind of joint contracts across the Navy and Sparkwall, or is that kind of just more about the access and how you open up I'm going
to hand that to Tom Watson, who's head of our Federal Services business, who's here to, Tom, to answer that question?
Yes, so there has that there are a few companies that are able to compete across both of those commands. The principal competitors in this space will be CACI, who also acquired a company recently, last year, that was a Carbo general dynamics, and previously CSRA. So CACI SAIC booz Allen Hamilton And Aecommer are principally the competitors in the Navsey and spareware customers.
And in talking about competitors and the business that CACI acquired last year, if I can just give a little bit of background to the We actually bid and lost the CACI to buy a smaller operation with revenues of about $80,000,000 almost exactly a year ago. And so we've been active in trying to acquire something in this area for quite some time. It was a result of that process that an enterprising investment bank went to add in and said you might like to talk to Circa. They might be interested. So we've been and in August of last year we started the conversations with the with Allian So we've been doing this for nearly 9 months and it has been a process an exclusive process where we have been had exclusivity for a considerable period of time and we've had time to do proper on it, which obviously gives us more comfort.
Thank you. The next question is coming from the line of Kane Martin. Please go ahead.
Just wanted to start off initially with some questions on margin. So if we look at the capability of SBU. And also the fact that it's been private equity owned and presumably sweated over the last few years as well. I'm wondering why the EBIT margin of 6% is not at higher particularly relative to the sort of margins that your Americas division generates some at the moment? And then secondly, has it been well invested under private equity ownership?
So there's any catch up that's required in terms of CapEx or elsewhere? And then thirdly, if you can shed some light on some of the free cash flow characteristics of the business as well. So obviously you've kindly given us EBIT down EBIT, but any insight into working capital and CapEx would help us just work out the cash implications of the transaction as well? Thanks.
Okay. From a free cash flow perspective, it's it's got strong characteristics. It's the U. S. Navy and our experience pays 30 days net.
So there'll be a small piece of work capital because the main cost in the business is labor. There's been there's relatively little CapEx. There's about just over $1,000,000 of Daa in it, and that would indicate low CapEx. Now to your question on private equity ownership, we're under new illusions. We expect we'll have to invest a bit of money in new PCs and new laptops and some new some new software packages, etcetera.
It may have been underestimated, but we don't think it's bad. And it's certainly not going to be an cost as we take it on, but we would expect an uplift initially in terms of that. In terms of margin, you've got to bear in mind, our business is fifty-fifty cost plus, versus firm fixed price. This business is 82% cost plus. And for us to earn a 6% to 7% margin, on a cost plus business.
That is hugely attractive from our point. It's from our perspective. It is accretive to group margin of 3 3.3percent,3.5percent. So we do see the margin characteristics as attractive particularly when you put them in the context of the lower risk cost plus nature of it.
Great. Thank you very much.
Thank you. The next question is coming from the line of Jo Blunt. Please go ahead.
Good morning, gentlemen.
Good morning, Greg.
Two questions if I may. Firstly, you talked about being a Tier 1 supplier. And I do understand that that has benefits over being a Tier 2 and beyond. Could you elaborate on what those benefits might be? And secondly, really for Rupert, you've talked historically about sort of searching through the rubble.
So I'm a little bit surprised by this acquisition, which seems to be the other end of the spectrum is not so much ruble as a high quality asset with high margins, high cash flow, good visibility in a growth market with a sense with a reasonably not ruble valuation. Could you address that, please?
Yes. So, Joe, thank you for that. And taking the the last question first. I mean, I think that clearly in the context of the UK market, we were on the lookout for opportunities that might arise following on from our acquisition of the healthcare business. But I would point out that this should not have been entirely unexpected.
We bought a company called BCP last year for $20,000,000 that does secure communications in the naval space. And we've never made any secret of our willingness to look to treat each opportunity and each margin in each by its own merits. And yes, the short term opportunities that may have come out of what I call Rubble Watch in the U. K. We say if I've got 1, but we will to see that is essentially opportunistic as it arises but that didn't mean to say that we weren't looking for opportunities continue to look for, which is in Australia, in the Middle East and the U.
S. And as I say, we've been we haven't been advertising are the fact that the U. S. Navy was attractive, but you could have seen, as I said, that we did an acquisition in there, last year. Sorry, what was your first question?
The first question was about the benefits of being a tier 1 supplier.
I'm going to ask Tom to to talk about that.
Yes. So I mean scale matters in this market. They are a leading provider at Navsea Circle today as a current leading provider at SPA War. But Circa has had ambition to be able to move into different elements of the market in the past And quite frankly, the Navy, as Rupert alluded to before, the Navy, buys on they make their acquisition decisions on corporate experience and pass performance and reputation. And circle has made has had worked on opportunities in the past to be able to move into the engineering and design side of the business, but it's very, very difficult to move in those markets because you can tend to get put into a particular box of capabilities.
So this acquisition, what that does is it's greatly expands our capabilities. So we can serve a greater breadth of the Navy market. It gives us that end to end life cycle support capability from upfront design, engineering, installation, integration and support. So it greatly expands the breadth of capabilities that we can provide for our customers as well as depth within the major acquisitions commands within the Navy. And then I'd go a step further to suggest that because it broadens the capabilities of the corporation, it gives us opportunity to leverage those internationally.
Joe, does that do for you?
Yes, my understanding was Tier 1 suppliers tend to be kind of more at the top table in discussions rather than just a sort of price taker and that the margins to be better. Is that right?
Well, I think it depends very much on the nature that they have one large fixed price contract. Which is the landing craft for the U. S. Army and who knows they may do more. But the essential thing about being a being the Navy's friend, the Navy's advisor vendor agnostic a trusted advisor to them.
The structure of the U. S. A market in terms of doing this cost plus work is very highly regulated. I mean, we have 5 or 6 government auditors sitting in our office supervising the billing of the cost plus worth and they will have the same. So the margins are kind of all much of a muchness in the cost stuff space because they are largely regulated.
The question is, is the risk reward a balance right and with cost plus comes very little risk. You have a reputational risk that you can go and give them bad service, but actually a risk of cost overruns and stuff like this does not exist. And when we go and compare 6% to 7% margins in the US for actually very little financial risk for seeing the risks that you have to run very often in the UK to generate those sorts of margins. We think that this is attractive. We're very comfortable with it it's got good returns on capital because there is very little capital employed in it.
But we don't see there might be a point of margin accretion. There might be some extra leverage we can get dealing overseas but this is the nature of this piece. We think it's going to grow by about 5% compound a year generating margins of 6% to 7% and that we think is that we're very content with that. Thank
way for your name to be announced. The next question is coming from the line of Alan Wells. Please go ahead.
Hi, good morning gentlemen. Alan from Exane. Just just a couple for me. You've touched on a couple of times the low capital intensity of this business. Obviously, it feels like a Docuard is needed to do a bunch this work.
Could you maybe talk a little bit about how the work is allocated out, where the work is undertaken, what facilities And then also maybe just thinking about the revenue synergy opportunities potentially on the international side, would you need to invest anything CapEx wise to build out capabilities or can you use all your existing infrastructure and just roll this know how on top of it in those markets? Thank you.
Tom, would you handle the U. S?
Yes. So the locations of this business are where the customer is. So they are mission aligned, engineering support and acquisition support services business. So they are where their customers are. As you would expect, the largest location is right next to the Washington Navy Yard, and in Washington, DC.
Other major locations are the major shipyard in Saskatoon, Mississippi, Bath Maine, where they build the DDGs and the Enviva ships down in Pascagoula, Mississippi. Beyond that, are located in all of the major concentration areas where the U. S. Navy is located on principally San Diego and Virginia Beach. And then beyond that, they're spread across other locations throughout the United States and Internationally.
So in terms of the growth of the international business. They already do some. They do work for the Australian ocean graphic research that institute they do work for in Taiwan and the South Korean native but it's been pretty low low intensity stuff in terms of the efforts they've been able to deploy to do that. In terms of we already have very strong maybe businesses in both the UK and Australia. But may I don't see so much CapEx issues expense, there may be some P and L expense as we go and invest in sales capability in these markets, but I have to say that neither the revenue upside from these nor the the costs of expanded or in our modeling.
We wait to see whether we can go and explain these capabilities very easily to our customers if are interested, we will see where that takes us. I personally think that both in the UK and in Australia there will be an appreciation of 1 of the trusted suppliers getting access to the coming access to world class naval architecture, ship and systems design and integration capability and notably the US of course already have significant interest with both those navies. So, there shouldn't be barriers to that. And all these markets are looking for new entrants and a stronger supply chain. So we'll see whether we can make any progress for that we go.
The other thing to say it is also a platform for more acquisitions like the BCP one that we've done, weather has given us very specific niche capability the maintenance of comms equipment that then goes and feeds through to the rest of our business. And again, that might be internationally applicable. Does that help? Okay. Well, listen, I think that we've done that.
Thank you very much for your attention. As I say, we think that this is an acquisition that does move the dollar as It's strategically important. It's financially compelling and leaves us with a strong balance sheet. So, look forward to talking to you all on and off over the next few days. Thank you and goodbye.