Following an initial announcement on 7 April, engineering services firm Lamprell has today announced its acquisition of Maritime Industrial Services (MIS) for NOK 1,869 million ($336.1 million). $336.1 million deal values Sharjah-based contractor at NOK 38 ($6.83 at stated exchange rate) a share. At the time of writing 81.5% of Lamprell shareholders have signed up to the deal.
The purchase is to be funded through a mixture of equity by way of a rights issue, debt (principally through a newly arranged $150 million medium term loan facility) and cash.
MIS is a diversified engineering and contracting group focused on the energy sector. The Sharjah, UAE firm offers a range of engineering and contracting services to the oil, gas and energy industry spanning the hydrocarbons industry from drilling to delivery and downstream projects. MIS principally covers the UAE, Kuwait and Saudi Arabia.
For financial year ending 31 December 2010 the business recorded net profit before tax of $37.1 million. At 31 March 2011 MIS held gross asset base of $351.6 million.
Lamprell also announced a fully underwritten three for ten rights issue, at a price of 232 pence per share, to raise gross proceeds of 139.4 million ($225.1 million) and approximately 132 million ($213.2 million) net of expenses.
Following the rights issue, Lamprell expects the acquisition to increase earnings per ordinary share substantially, and deliver return on investment for the first year at least equal to the cost of capital and exceed it thereafter.
Lamprell CEO Nigel McCue said the transaction “represents a significant step for Lamprell in its evolution as we continue to expand both the breadth and depth of our service offering and the geographical range of our customer base”.
McCue cites a “strong complementary fit” between the two firms, and expects the enlarged group can “pursue new opportunities with enhanced resource and technical competence”.
“In particular, we see real competitive advantage in the companies’ combined engineering offering as well as greater access to new business in the downstream and onshore sectors”.
MIS Managing Director Kevin said “this agreement is in the best interests of our shareholders, and the complementary nature of our two businesses provides significant opportunities for the enlarged group”.
