Hunting announced the acquisition of Innova-Extel Acquisition Holdings for a cash consideration of US $125 million.
The consideration, which will be paid on completion, will be reduced or increased by any debt or cash respectively remaining in the business on the date of completion. The acquisition is subject to certain conditions which are expected to conclude by the end of August 2010, when completion will take place. Before taking account of related acquisition costs, it is expected the acquisition will be earnings enhancing in 2010.
Innova-Extel's consolidated 2009 profits before tax were US $1.1 million with an EBITDA of US $13.7 million, after adjusting for non-recurring items of US $0.8 million.
The consolidated figures comprise:
The net assets and gross assets of Innova-Extel at December 31, 2009 were US $55.3 million and US $119.8 million respectively.
The acquisition will add a significant element to Hunting's Well Construction portfolio. The global directional drilling market grew at an annual average rate of 22% per annum from 2000 to 2008. From 2000 through 2009, annual growth of the rotary steerable market was approximately 44%. Today, approximately two-thirds of all wells drilled in the world are expected to be drilled either directionally or horizontally.
Hunting is acquiring Innova-Extel from American Capital, certain American Capital affiliates and senior management. American Capital is a NASDAQ listed, US private equity firm and asset manager. Following completion of the acquisition, the senior management will continue to be involved in the business.
Commenting on the acquisition, Dennis Proctor Chief Executive of Hunting said, "We are delighted to be announcing the acquisition of Innova-Extel which forms an important component of our stated growth strategy.
Innova-Extel adds a very important part to our technology strength for high temperature, high pressure applications. Operators rely on this technology to acquire real time data in downhole measurements. Combined with the growth of directional and horizontal drilling and our existing product offering, this acquisition will further strengthen our position in complex drilling environments."
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