Technip buys subsea service firm Global Industries
France-based engineering firm Technip announced a $937 million deal to acquire US-based Global Industries, reinforcing its leadership in the subsea segment of oil services.
The two companies have entered into a definitive merger agreement whereby Technip will pay $8/share for Global Industries.
The transaction values Global Industries at just under $1.1 billion (€768 million at current exchange rates), including approximately $136 million of net debt. The board of directors of Global Industries has unanimously approved the transaction.
- The transaction price represents a 55% premium to Global Industries’ share closing price on September 9, the last day prior to announcement of the transaction. The transaction is to be funded using existing cash balances and credit facilities.
- Global Industries brings to Technip its complementary subsea know-how, assets and experience, comprising 2,300 employees operating 14 vessels, including notably two newly-built leading edge S-Lay vessels, as well as strong positions in the Gulf of Mexico (US and Mexican waters), Asia-Pacific and the Middle East.
- The acquisition of Global Industries reinforces Technip’s leadership in the fast-growing subsea market. Strong revenue synergies are expected as the acquisition will substantially increase Technip’s current capabilities and expand its addressable market by around 30% in deep-to-shore subsea infrastructure. Cost synergies are estimated to be at least $30 million.
- Given the anticipated synergies, the transaction is expected to be accretive to Technip's earnings per share by around 5 to 7% in 2013.
The transaction is expected to close early in 2012. The management teams of Global Industries and Technip will work closely together to define the integration plan, the companies said.
Thierry Pilenko, CEO of Technip, said: “The acquisition of Global Industries reinforces Technip's leadership in subsea, one of our three market segments alongside onshore and pffshore. The subsea market looks likely in 2011 to show a record amount of orders for our industry and our own backlog at end-June 2011 is above its previous peak.
“We see that our customers continue to firm up a substantial number of large offshore developments with Brazil, the Gulf of Mexico, West Africa and Asia Pacific leading the way to drive future growth.”
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