Fluor to acquire Dutch industrial services provider Stork for $755 million

Fluor has signed an agreement with UK-based private equity firm Arle Capital Partners to acquire 100% of Stork Holding B.V., based in the Netherlands, for an investment of approximately €695 million ($755 million). 

Stork is a global provider of maintenance, modification and asset integrity services associated with large existing industrial facilities in the oil and gas, chemicals, petrochemicals, industrial and power markets. 

Founded in 1827, Stork has built a powerful brand in the industry and has long-term relationships with a diverse range of blue chip customers. It has operations in Continental Europe, the UK, the Middle East, Asia Pacific and the Americas, with an annualized run-rate revenue of approximately €1.6 billion ($1.7 billion) and EBITDA of approximately €100 million ($109 million), implying a transaction multiple of just under seven times EBITDA. 

“The acquisition of Stork is consistent with Fluor’s goal to further enhance our integrated solutions capabilities in thoughtful, strategic ways that will increase the value we deliver to our clients and shareholders,” said Fluor’s CEO David Seaton. “We are pleased to welcome Stork’s talented workforce of more than 15,000 employees, which will provide us with additional flexibility and capacity to increase our maintenance and direct construction activities. Stork is highly complementary to Fluor as it gives both businesses the opportunity to market diverse services and capabilities to new customers and across new geographies.

“Stork’s business is largely driven by ongoing operating budgets and is therefore less impacted by volatile commodity prices," the CEO continued. "In addition, Stork’s continuous site presence will help us improve our ability to meet our customers’ needs throughout the full lifecycle of an operating plant, and provide Fluor with an ongoing earnings stream and robust growth opportunities."

Upon closing of the acquisition, Fluor will begin combining Fluor’s operations and maintenance organization with Stork. Current Stork CEO, Arnold Steenbakker, will lead the combined group and report directly to Fluor’s CEO, David Seaton. The management team will be formed by Stork’s existing management combined with the managers of Fluor’s operations and maintenance business. 

The combined group, branded Stork and headquartered in the Netherlands, will have an annual turnover of approximately €2.1 billion ($2.3 billion) and a total of approximately 19,000 employees.

“We are very proud that a world-class company like Fluor recognizes Stork’s strong reputation, capable workforce and performance as a global industrial services provider," said Steenbakker. "The combination will create new opportunities to expand our global footprint and deepen the product and services offering to our customers. Stork’s activities are complementary to those of Fluor and the combination will create a global leader in the industrial services business.”

The acquisition is expected to be accretive to Fluor’s earnings per share in 2016. Fluor expects to achieve significant synergies, it said, including increased revenues from cross-selling and expansion into new markets.

The transaction multiple would be under six times Stork’s EBITDA including run-rate revenue synergies. Fluor intends to fully finance the cash required for the transaction through the issuance of debt in international markets. The acquisition is expected to close in the first half of 2016 and is subject to regulatory approvals and consultation procedures with Stork’s work council. 

Goldman Sachs acted as exclusive financial adviser to Fluor.