Hunting acquires W L Doffing a specialist machining business for US$20.8m
Hunting PLC (LSE:HTG), the international energy services company today announces the completion of the acquisition of the business and assets of W L Doffing, L.P. ("Doffing") a company that provides high precision machining services to the energy industry, for a cash consideration of US$20.8m (c.£12.8m).
The consideration paid is on a cash-free-debt-free basis and will be funded from Hunting's cash balances. An additional consideration of up to US$2.0m (c.£1.2m) is also payable on the achievement of certain performance conditions measured over a two year period. Doffing is one of the acquisitions, whose aggregate consideration amounted to around £90m, referred to in the announcement of the acquisition of Titan on 5 August 2011.
Doffing is a supplier of precision machined components to the global energy services industry focusing on equipment used for measurement-while-drilling (MWD) and logging-while-drilling (LWD). The business provides critical tolerance machining, prototyping and first-pass specialist production services. The business also holds intellectual property for manufacturing other key components used in the oil and gas well bore. Doffing will add to Hunting's product offering through its Well Construction and Well Completion segments.
Located in Houston, Texas, W L Doffing was founded in 1977 and employs around 75 personnel. Key management will remain with the business after completion of the acquisition. Doffing operates from one facility totalling over 29,000 sq. ft.
In the six months to 30 June 2011 Doffing reported unaudited US GAAP revenue of US$9.2m (c.£5.7m), profit before taxation of US$2.2m (c.£1.4m) and EBITDA of US$2.4m (c.£1.5m).
The acquisition of the business and assets of Doffing is expected to be earnings enhancing in the first full financial year before acquisition costs and normal acquisition adjustments such as fair value adjustments and the amortisation of intangible assets. Doffing is owned by a group of investors, which includes two of Doffing's senior managers.
Commenting on the acquisition, Dennis Proctor, Chief Executive of Hunting said:
"Doffing's machining expertise is an excellent fit with Hunting's existing manufacturing capabilities and complements our technology offering. The delivery of products to exacting machining requirements is increasingly a feature of oil and gas drilling and the ability to complete a machining job on a first-pass will enable Hunting to participate in increasingly complex well designs, with corresponding opportunities to supply other products and services from our portfolio."