Engineering and project services company Clough disclosed Thursday that it has acquired e2o, a leading provider of specialized commissioning, completions and hazardous area inspection services to the energy and resources sectors.
Clough will acquire e2o for approximately $15 million with $9 million in cash being paid on completion of the deal and an additional $5 million in cash and shares being paid over a three-year period, subject to meeting certain performance criteria.
The acquisition is expected to be Earnings Per Share (EPS) accretive in the first full year of ownership. For the financial year 2014, e2o should deliver in excess of $5 million EBIT from forecast revenue of approximately $42 million.
e2o is well positioned in the LNG sector, and is currently working on commissioning scopes for major LNG projects, including Chevron's Wheatstone LNG, Origin's Australia Pacific LNG, and Santos' Gladstone LNG projects. e2o will continue to operate under its existing strong management team and brand to provide an integrated and independent commissioning service to clients. This will increase Clough's project service capabilities and enhance the company's range of services to operators in the energy and resources industry.
The Australian commissioning market has an excellent outlook with significant growth predicted in this sector in the next four years, as major LNG projects move from construction to operations.
Clough CEO and Managing Director Kevin Gallagher said: "The acquisition of e2o aligns with our growth strategy, supporting our plan to strengthen expertise in our commissioning and asset support business and to become the pre-eminent commissioning contractor in Australia.
"e2o is one of Australia’s leading commissioning contractors that has achieved and continues to achieve rapid growth. The company provides access to a database of more than 2,000 highly qualified personnel, providing the ability to quickly mobilize professional teams to suit project requirements.
"Through our acquisition of e2o Clough aims to provide clients with a seamless transition from construction to operations resulting in a flawless start-up of facilities and increased productivity."
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