Avingtrans plc Acquires of Exterran UK
Avingtrans plc, which designs, manufactures and supplies critical components and associated services to the global aerospace, energy, and medical sectors, announces that it has acquired the entire issued share capital of Exterran (UK) Ltd. ("Exterran UK"), the UK operations of US-based Exterran for a total consideration of £1 (the "Acquisition").
The principal activity of the acquired business, which is based in Walsall, is the design, fabrication and installation of products for the global oil and gas market, including equipment solutions for petroleum production, gas processing, produced water treatment and aftermarket parts and services. The business has traded in the UK for many years and has been a long standing customer of Metalcraft. The business, which employs 85 people, will be integrated into the Energy and Medical division of Avingtrans. This new part of the division will henceforth be known as Maloney Metalcraft Ltd, to reinvigorate a previously well-known brand name in this market sector. Its key customers include Petrofac, Talisman, Porvair, EDF and Shell.
The Board believes that the Acquisition complements the existing capabilities within its energy offering and will provide cross selling opportunities. It will also enable the Company to pitch for larger projects once the Acquisition is fully integrated. The Board believes that the experience and capability of the Exterran UK engineering team will provide additional expertise as Avingtrans looks to increase its product offering and grow the division.
In the financial year ended 31 December 2012, Exterran UK reported revenue of £ 16.3 million and an adjusted loss before tax of £0.5m (which includes an adjustment for the removal of a loss making contract which was novated following the year end). Exterran UK is being acquired with a cash balance of £ 2 million, which management believes will be sufficient to fund the turnaround of the business, and on completion is expected to have net assets of circa £1.2 million. The Company expects Exterran UK to be at least break even in the year ending 31 May 2015 and earnings enhancing thereafter. (1).
Steve McQuillan, Chief Executive of Avingtrans commented:
"We are pleased to announce the acquisition of Exterran UK which has a strong pedigree. This addition to the Avingtrans Group reinforces our plan to build the business around our two core divisions; Metalcraft (Energy and Medical) and Sigma (Aerospace) and provides scale and expertise in the attractive Energy marketplace. We are delighted that they will be joining the Group and are confident of our combined future success."