06.09.2011

HMS Group completed acquisition of Belorussian pump manufacturer

Moscow, Russia – September 6, 2011 – HMS Group (LSE: HMSG), the leading pump manufacturer and provider of flow control solutions and related services in Russia and the CIS, announces today that it has completed an acquisition of Bobruisk Machine Building Plant (the “Plant”), located in Bobruisk, Belarus – one of the largest manufacturer of specialist centrifugal pumps in the CIS.

HMS Group paid total cash of USD 9.6 million for 100% of newly issued shares equal to 57% of the share capital of the Plant.  The transaction was fully financed with debt capacity. All funds invested in the Plant will be used for the development of new product lines and purchase of relevant new production machinery.  HMS Group acquired the Plant under authorization of the Belorussian government, and is considered to be a strategic investor. The cash consideration of USD 9.6 million corresponds to annualized 2011 EV/Sales multiple of 0.7x pre-money, and annualized 2011 EV/EBITDA multiple of 5.6x pre-money.

According to Artem Molchanov, Managing Director (CEO) of HMS Group, “This transaction is a great fit with HMS Group. The Plant`s established manufacturing capability creates significant opportunities for HMS Group to enhance our customer offering. Combining current product line of HMS with “hot cycle” refining pumps by the Plant will allow us to create production center of refining pumps and tap into the new market niches”.

Bobruisk Machine Building Plant is the manufacturer of centrifugal pumps and appliances used in oil refining, petrochemical, metallurgy and mining, power generation, pulp and paper, cement industries, as well as for handling pure and waste waters in municipal, agricultural and industrial water systems. The Plant remains one of the few suppliers in the CIS of mission critical pumps for key technological processes in refineries, metallurgy and mining production. The Plant has a complete production cycle: from foundry with unique metal alloy handling competence to machining and assembly. The Plant achieved sales of approximately RUB 222 million with EBITDA of RUB 29.7 million, implying a 13.4% EBITDA margin in 1H 2011.

The HMS Group is the leading pump manufacturer and provider of flow control solutions and related services to the oil and gas, nuclear and thermal power generation and water utilities sectors in Russia and the CIS. The HMS Group’s products are mission-critical elements of projects across a diverse range of industries. It has participated in a number of large-scale infrastructure projects in Russia, including providing pumps and modular equipment to the Vankor oil field and pumping stations on recent trunk pipelines projects linking Russia’s core oil producing areas to export ports on the Pacific Ocean and Baltic Sea. The Group reported revenues of RUB 7.1 billion, adjusted EBITDA of RUB 1.6 billion and profit of RUB 1 billion for the three months ended March 31, 2011. The HMS Group’s global depositary receipts (“GDRs”) are listed under the symbol “HMSG” on the London Stock Exchange. www.grouphms.com
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For further information, please contact:

Investor Relations: Inna Kelekhsaeva, Deputy Head of Investor Relations
Phone: +7 (495) 730-6601 x 1318, Kelekhsaeva@hms.ru

Media Relations: Nozima Karimova, Head of Press Service
Phone: +7 (495) 730-6610, Karimova@hms.ru

Disclaimer
The information contained herein has been prepared using information available to HMS Hydraulic Machines & Systems Group Plc (“HMS Group” or “HMS” or “Group” or “Company”) at the time of preparation of the presentation. External or other factors may have impacted on the business of HMS Group and the content of this presentation, since its preparation. In addition all relevant information about HMS Group may not be included in this presentation. No representation or warranty, expressed or implied, is made as to the accuracy, completeness or reliability of the information.
Any forward looking information herein has been prepared on the basis of a number of assumptions which may prove to be incorrect. Forward looking statements, by the nature, involve risk and uncertainty and HMS Group cautions that actual results may differ materially from those expressed or implied in such statements. Reference should be made to the most recent Annual Report for a description of the major risk factors. This presentation should not be relied upon as a recommendation or forecast by HMS Group, which does not undertake an obligation to release any revision to these statements.
This presentation does not constitute or form part of any advertisement of securities, any offer or invitation to sell or issue or any solicitation of any offer to purchase or subscribe for, any shares in HMS Group, nor shall it or any part of it nor the fact of its presentation or distribution form the basis of, or be relied on in connection with, any contract or investment decision.