Irish-headquartered construction and engineering firm Kentz, has taken over a US-based Valerus Field Solutions for $435m (€316m) in what is a major expansion for the company.
Kentz, whose head office is in Clonmel, Co Tipperary, said the benefits of the deal include an increased exposure to high value, high-margin contracts; expanded offering through the addition of 665 employees including 198 personnel with demonstrable experience in gas handling and processing; diversified and expanded operational footprint with Valerus FS strongly positioned in the US onshore oil and gas market, including shale gas, a new market for Kentz.
Christian Brown, chief executive of Kentz said: “We have achieved exceptional organic growth since listing in 2008.
“We have also highlighted our desire to expand our offering through selective acquisition that creates shareholder value.
“The board of Kentz believes that, consistent with our strategy, the acquisition of Valerus Field Solutions will help to establish Kentz as a recognised market leader in providing highly skilled process engineering, engineering, procurement, construction management: and EPC services for small and medium-sized oil and gas processing facilities worldwide.
“It also provides us with a significant presence in the growing US market.”
It also means an increased exposure to Latin American markets with Valerus FS’s established presence in Brazil, Mexico, Colombia and Venezuela; a strong, diversified client base with over 60% of Valerus FS’s work being from repeat clients, only a few of which are current Kentz customers; and increased opportunities for Kentz by providing services to the outsourced portion of Valerus FS’ projects.
Valerus recorded a pre-tax profit of $51.5m and revenue of $492.9m for the financial year 2012. Kentz, which started life as a hardware firm in Clonmel almost 100 years ago, now has 14,500 employees in 30 countries and had revenues last year of just over $1.5bn
Graham Reid who led the EY team in Dublin, which advised on the deal said: “We are delighted to have been able to assist Kentz on this important strategic acquisition.”
Barclays was the only Irish-based bank to take part in the funding.
“Kentz’s proposed acquisition of Valerus Field Solutions is an important step forward in building out their global capability.”
“We are having more acquisition discussions with our clients in recent months and expect to see a step up in acquisition activity by large Irish corporates in 2014,” said Helen Kelly, head of large corporates at Barclays Bank Ireland plc.
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