(TSX: SCL)
TORONTO,
May 8, 2014 /CNW/ - SHAWCOR LTD.
(TSX: SCL) (ShawCor) today announced that it has entered into a
definitive purchase agreement to acquire all of the outstanding
shares of Desert NDT LLC ("Desert") for a total consideration of
approximately US$260
million. Desert is a Houston-based provider of non-destructive
testing ("NDT") services for new oil and gas gathering pipelines
and infrastructure integrity management services. Desert
operates through 18 branches located in major U.S. oil and gas
basins and its trailing twelve month EBITDA is in excess of
US$33 million with operating income
of approximately US$22 million.
The transaction is subject to U.S. regulatory
approval and is expected to close in the third quarter of 2014. The
acquisition will be funded with cash and through available
revolving credit facilities. Post-closing, ShawCor may
consider raising equity to repay a portion of its outstanding
revolving debt. The transaction is expected to be accretive to
ShawCor's earnings per share within the first 12 months.
Mr. Steve Orr,
President and CEO of ShawCor stated that: "We are very pleased to
welcome Desert to the ShawCor family. Desert's NDT offering is
expected to increase ShawCor's exposure to the growing
unconventional oil and gas production in the United States, and to complement the
business of Shaw Pipeline Services, ShawCor's NDT business
unit. The acquisition of Desert will also be a vehicle to
advance our integrity management strategy of providing management
and data centric solutions for our customer's production,
processing and pipeline assets. Desert's integrity management
business complements our recent investments in Zedi and Vintri and
is anticipated to provide ShawCor the foundation to generate
recurring revenue from our customers' operating expenditure
budgets".
ShawCor Ltd. is a global energy services company
specializing in products and services for the pipeline and pipe
services and the petrochemical and industrial segments of the oil
and gas industry. The Company operates through eight divisions
with over seventy-five manufacturing and service facilities located
around the world. ShawCor will acquire Desert NDT from an
investment group including Sterling Partners and Desert's
founders. Sterling Partners is a growth-oriented private
equity firm with offices in Chicago, Baltimore, and Miami.
This news release contains forward-looking
information within the meaning of applicable securities
laws. This forward looking information is based on
assumptions, estimates, and analysis made in the light of the
Company's experience and its perception of trends, current
conditions and expected developments, as well as other factors that
are believed by the Company to be reasonable and relevant in the
circumstances. Forward-looking information involves known and
unknown risks, uncertainties and other factors which may cause
actual results, performance or achievements to be materially
different from those predicted, expressed, or implied by the
forward-looking information. The forward-looking information
is provided as of the date of this news release and the Company
does not assume any obligation to update or revise the
forward-looking information to reflect new events or circumstances,
except as required by law. While determined in accordance with U.S.
GAAP, Desert's trailing twelve month EBITDA disclosed above is
calculated in a similar manner to ShawCor's EBITDA, which is
described in ShawCor's Management Discussion and Analysis dated
May 1, 2014 (available at
www.sedar.com).
SOURCE ShawCor Ltd.