Cardno announces intention to Demerge

29 August

Cardno Limited (ASX: CDD) (“Cardno”) today announced its intention to demerge its quality, testing and measurement business from its consulting business - subject to shareholder and other approvals.

The demerger will result in two independent ASX listed entities:

Demerger mechanics, timing and execution

The demerger is proposed to occur by way of a scheme of arrangement and capital reduction.

If the demerger is implemented, eligible Cardno shareholders (other than Selling Shareholders)[1] will receive one Intega share for every one Cardno share they hold. No capital is being raised through the proposed demerger and no additional debt is being created or taken on. Cardno’s largest shareholder, Crescent Capital Partners, owns or controls ~50.1 per cent of Cardno issued shares today and thus will own or control ~50.1 per cent of Intega shares post demerger.

The demerger is subject to final Board approval and regulatory, court and shareholder approvals. If approved, the demerger is expected to be completed in the first half of the 2020 financial year.

Further details of the demerger will be included in a Scheme Booklet to be sent to shareholders.

Key indicative dates are:

Background to Proposed Demerger

In 2017, the Cardno board separated the majority of the QTM Business from the Consulting Business into “Portfolio Companies”. Since this time, the QTM Business has performed strongly and grown both organically and through acquisition. In FY19, the QTM Business represented ~44% of the total EBITDA of the Cardno Group (pro-forma basis). The QTM Business today has evolved to a point where it has a distinct operating model, value proposition, staff profile and culture.

Cardno Chairman Michael Alscher said: “After considering alternatives, the Board is unanimous in its view that the proposed demerger is an important step in building long term value for shareholders and for the strategic future of Cardno.”

“The Board’s view is that both the Consulting Business and the QTM Business are of sufficient scale to operate independently. The separation will enable each business to focus on their competitive position by concentrating on specific growth opportunities and distinct cultural and operating models. By separating, each business will also have increased transparency, greater access to capital and debt markets to pursue strategic objectives and increased performance accountability.”

“We also see value in offering shareholders with different investment strategies and preferences the opportunity to choose their level of investment in Cardno and Intega. At point of demerger, eligible Cardno shareholders will receive one Intega share for every one Cardno share they hold,” said Mr Alscher.

Cardno post the Proposed Demerger

Cardno Consulting is an environmental, infrastructure and development consulting business with around 4,482 employees in 124 permanent offices as at 30 June 2019. It is structured into three divisions: Asia Pacific, the Americas, and International Development.

Cardno Consulting will continue to be led by existing Chief Executive Officer and Managing Director, Ian Ball and Chief Financial Officer, Peter Barker and will continue to be known as Cardno.

The services Cardno Consulting focuses on include:

Intega post the Proposed Demerger

Following the demerger, Intega will be a separate legal entity listed on the ASX and will operate the QTM Business. The QTM Business has around 1,957 employees in 101 permanent offices as at 30 June 2019.

The QTM Business operates primarily in Australia, the United States, Canada and New Zealand under four primary operating brands: Construction Sciences, Raba Kistner, T2 Utility Engineers and PPI.

Intega will be led by Chief Executive Officer and Managing Director, Matt Courtney, who has led the business since 2016 and Chief Financial Officer, Shael Munz.

The services the QTM Business provides include:

Intega leadership

Intega will be led by Matt Courtney as CEO and Shael Munz as CFO.

Matt Courtney has more than 30 years’ experience providing quality control and quality assurance to all sectors of construction for government and private clients, with multiple delivery modes including JV, Alliances, EPCM, and PPP. He has around 11 years’ experience across management roles at Cardno and has led the acquisition and integration of a number of businesses in Australia and in the United States. He has a comprehensive knowledge of each business within Intega and a strong understanding what’s required to build on their existing success. Matt holds a Masters Degree in Engineering Science from the University of New South Wales, and is a member of the Australian Institute of Company Directors.

Shael Munz has over 20 years of domestic and international experience in the services, media and banking fields. She was appointed Group Financial Controller of Cardno in February 2016 before moving over to the Construction Sciences division as CFO in February 2019. Shael holds a Bachelor of Business (Accounting) from Charles Sturt University, is a Chartered Accountant (CA 2001) and has completed courses in treasury management (University of Melbourne), leadership (Cert 4 Diploma of Management) and project management (Australian Institute of Management).

Please view the “Proposed Demerger of Intega” presentation as an accompaniment to this release

[1] ‘Selling Shareholders’ include (i) ineligible foreign shareholders, being Cardno shareholders whose registered addresses are outside Australia and its external territories, Ecuador, New Zealand, Papua New Guinea, United Kingdom, and United States , or any other jurisdiction which Cardno reasonably believes it is not prohibited or unduly onerous or impractical to implement the demerger and to transfer the Intega Shares to the Cardno shareholder and (ii) Cardno shareholders who individually hold 5,000 or fewer Cardno shares and who lodge a valid sale election form.




Source:  Cardno -

Contact:  Jackie McPhee Corporate Marketing Manager t: +61 7 3100 2142

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