Oil and gas services company Hunting PLC (HTG.L) has taken over U.S. electronic technology company Innova-Extel for $125 million iAcquisition. Houston-based Innova-Extel – which was founded in 1989 – employs approximately 300 people at two sites.
Hunting PLC is an international energy services provider to the world’s leading upstream oil and gas companies. Established in 1874, it is a fully listed public company traded on the London Stock Exchange. The Company maintains a corporate office in Houston and is headquartered in London. As well as the United Kingdom, the Company has principal operations in Canada, China, Holland, Hong Kong, Indonesia, Mexico, Singapore, United Arab Emirates and the United States of America.
Innova-Extel is a provider of “harsh environment” electronics technology to the energy industry. Hunting expects the acquisition to add a significant element to its well construction portfolio and to be earnings enhancing in 2010.
The business generated EBITDA (earnings before interest, taxes, depreciation and amortisation) of US$14.2 million in 2009. Extel, a precision machining facility focused on providing downhole completion tools to the oil and gas industry, posted an EBITDA loss of US$0.5 million in 2009.
The net assets and gross assets of Innova-Extel at 31 December 2009 were US$55.3 million and US$119.8 million respectively.
The acquisition will add a significant element to Hunting’s Well Construction portfolio. The global directional drilling market grew at an annual average rate of 22% per annum from 2000 to 2008. From 2000 through 2009, annual growth of the rotary steerable market was approximately 44%. Today, approximately two-thirds of all wells drilled in the world are expected to be drilled either directionally or horizontally.
Hunting is acquiring Innova-Extel from American Capital, certain American Capital affiliates and senior management. American Capital is a NASDAQ listed, US private equity firm and asset manager. Following completion of the acquisition, the senior management will continue to be involved in the business.
Innova-Extel’s consolidated profits before tax for the year 2009 was US$1.1 million. Net assets and gross assets of as at December 31, 2009 were US$55.3 million and US$119.8 million respectively.
Commenting on the acquisition, Dennis Proctor Chief Executive of Hunting PLC said:
“We are delighted to be announcing the acquisition of Innova-Extel which forms an important component of our stated growth strategy.
Innova-Extel adds a very important part to our technology strength for high temperature, high pressure applications. Operators rely on this technology to acquire real time data in downhole measurements. Combined with the growth of directional and horizontal drilling and our existing product offering, this acquisition will further strengthen our position in complex drilling environments.”