Sondex Acquires Applied Electronic Systems
Sondex has acquired Applied Electronic Systems Inc., a USA-based company providing oilwell logging and pipe recovery equipment, for a maximum consideration of $14 million (£7.9 million).
AES is a leading designer, manufacturer and supplier of specialist technology used within oil wells during both drilling and production operations. Sondex said that the deal reflected the group's strategy of reinforcing organic growth – international expansion and new product development – through carefully targeted acquisitions.
Sondex added that the acquisition would provide a complementary product range for its Wireline Division. AES designed and manufactured equipment includes the Free Point Indicator, used throughout the industry as a standard method for assisting in the retrieval of drill pipe which has become stuck in the well. This tool will significantly enhance Sondex's capabilities; its own range of specialist equipment already features the advanced Downhole Electric Cutting Tool.
Sondex said that the growing and profitable AES business would also provide a platform for distribution of other Sondex products in North America. AES, based in Louisiana, has a significant presence in the USA, a market which accounts for 80 percent of its sales.
Martin Perry, Chief Executive of Sondex, said: "We are delighted to be able to add this complementary range of technology to our existing product lines, and expect enhanced growth through on-going strong market demand and geographical opportunity."
He added: "This acquisition is in line with our stated strategy of pursuing opportunities that enhance the product lines and market reach of the Group and we remain committed to continuing our strategy of investing for growth both organically and through targeted acquisitions."
The announcement of the AES acquisition coincided with Sondex Group's announcement of its financial results for the six months to August 31, 2005. (The results were presented under International Financial Reporting Standards and comparative figures for 2004 were restated accordingly.) In the six months to August 31, 2005, turnover increased by 93 percent to £18.8 million compared with £9.7 million in the corresponding half year in 2004. The Group achieved an operating profit before financing costs and amortisation of £2.4 million against a first half operating profit of £0.44 million in 2004.Research and development expenditure in the period was increased by 81 percent to £2.6 million.
Previous Sondex acquisitions have included the Aberdeen-based Geolink group for £29.5 million in June 2004 and Computer Sonics Systems (CSS) of Canada for £1.6 million in December 2003.