Shares in Kentz jump on news of $435m Valerus acquisition
SHARES in Irish-founded engineering group Kentz jumped by 10pc this morning after the company announced its intention to buy US firm Valerus.
Tipperary-headquartered Kentz said the purchase of Valerus, a field solutions business, will help establish its offering for small and medium-sized oil and gas processing facilities.
Kentz, which itself was subject to takeover rumours this year, will pay $435m (€317m) in cash for Valerus, financed by a $400m term loan, existing cash reserves or a new $160m revolving loan facility.
"We've found a very strong and agile business with a strong culture that fits our own, so we're pleased to have found it," said Kentz chief executive Christian Brown.
He added that the acquisition will give Kentz access to the US market for both conventional oil and shale, as well as to Latin America, with Valerus established in Venezuela, Colombia and Mexico.
The deal adds about 700 people to Kentz's 14,500 employees.
The firm added that the acquisition is expected to be earnings enhancing within the first full financial year of ownership and should be completed shortly after a shareholder meeting on January 2.
Kentz traces its origins back to 1919 when it started life as a local electrical contractor based in Clonmel, Co Tipperary.