"CDS Engineering has employed its proven separation technology in numerous surface applications," said Joseph H. Netherland, Chairman, President and Chief Executive Officer of FMC Technologies. "There is significant growth potential for this technology as it is expanded into subsea processing applications. The combination of our subsea, surface platform and floating production businesses with the processing technology and experience of CDS Engineering will provide customers with comprehensive, integrated completion and processing solutions."
"We are pleased to combine our business with that of FMC Technologies," said Dr. Rombout A. Swanborn, Managing Director of CDS Engineering. "With this combination, our industry-leading separation technologies will now have greater access to global markets."
In 2003, CDS Engineering and associated assets are expected to generate revenue of $27 million. FMC Technologies' $48 million purchase price, plus its assumption of $2 million of net debt, is 9.0 times the combined 2003 projected EBITDA (earnings before interest, taxes, depreciation, and amortization) of $10.2 million, adjusted to exclude a charge related to the termination of executive compensation agreements. The acquisition is expected to be marginally accretive in 2003 for FMC Technologies.
Under the terms of the acquisition agreement, FMC Technologies will buy the remaining 45 percent of CDS Engineering and associated assets in 2009 for slightly less than 6.5 times the average of 2007 and 2008 EBITDA.
CDS Engineering will be part of FMC Technologies' Houston-based Energy Production Systems business and will continue to be headquartered in the Netherlands. CDS Engineering also has offices in Sandvika, Norway; Perth, Australia; and Houston.
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