Oceaneering Acquires Grayloc Products
Oceaneering International has acquired Grayloc Products LLC, a manufacturer of high performance clamp connectors primarily for the oil and gas industry. The purchase price was approximately $41.0 million, subject to a post-closing working capital adjustment.
The Grayloc® brand, with over 50 years of history, is the recognized standard for clamp connectors by the oil and gas industry and is synonymous with quality and reliability. These clamps are used extensively in production manifold, flow line, and valve installations. With engineering and manufacturing locations in Texas and Scotland, Grayloc is the industry global market leader with an estimated 2004 market share of 45% to 50%.
During the last half of 2005 Oceaneering expects this acquisition to be accretive to net income in the range of $1.3 to $1.6 million. The acquired operations are anticipated to generate approximately $16.0 to $18.0 million in revenue and $3.0 to $3.5 million of operating income, after about $0.4 million of depreciation and amortization expense. In 2006, Oceaneering projects the incremental net income accretion to be $3.0 to $4.0 million.
John Huff, Chairman and Chief Executive Officer, stated, "We are very pleased to add Grayloc's connectors to our specialty, niche-market products offering to the oil and gas industry. The Grayloc® brand is the clamp explicitly specified for most projects in the U.S.
"We intend to retain the Grayloc management team, led by Gerald Marsh, and qualified work force intact as we jointly endeavor to grow clamp connector sales worldwide, develop synergies with our current pipeline connectors, and explore growth opportunities with the acquired technology.
"As a result of this acquisition, we are increasing our estimate of
Oceaneering's 2005 EPS to a range of $1.95 to $2.20 from the $1.90 to $2.15
range included in our first quarter 2005 earnings press release."
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