Kentz Corporation Limited Acquires Valerus Field Solutions

Posted: 9th December 2013 08:50

Kentz Corporation Limited (LSE: KENZ), the holding company of the Kentz engineering and construction group, announces the proposed acquisition of the Valerus field solutions business ("Valerus FS") for US$435 million in cash, subject to a working capital adjustment, payable in cash at Completion (the "Acquisition").
Key Highlights

- increased exposure to high value, high margin contracts further up the value chain;
- expanded offering through the addition of 665 employees including 198 personnel with demonstrable experience in gas handling and processing;
- diversified and expanded operational footprint with Valerus FS strongly positioned in the US onshore oil and gas market, including shale gas, a new market for Kentz;
- increased exposure to Latin American markets with Valerus FS' established presence in Brazil, Mexico, Colombia and Venezuela;
- an increased ability to leverage and enhance existing EPC capabilities and differentiators in onshore oil and gas processing facilities;
- the potential to offer integrated solutions for clients and bid on contracts, where previously the Group would not have been able to due to the specific range of capabilities required;
- an increased focus on mid-sized modular projects expected in gas plants and EPF;
- a strong, diversified client base with over 60 per cent. of Valerus FS' work being from repeat clients, only a few of which are current Kentz customers; and
- increased opportunities for Kentz by providing services to the outsourced portion of Valerus FS' projects.
Financial Highlights

Christian Brown, Chief Executive Officer of Kentz commented: "We have achieved exceptional organic growth since listing in 2008. We have also highlighted our desire to expand our offering through selective acquisition that creates shareholder value. The Board of Kentz believes that, consistent with our strategy, the acquisition of Valerus Field Solutions will help to establish Kentz as a recognised market leader in providing highly skilled process engineering, EPCM and EPC services for small and medium sized oil and gas processing facilities worldwide. It also provides us with a significant presence in the growing US market."

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