ENGINEERING firm Kentz saw its share price soar by nearly 13 per cent yesterday after it unveiled a $435m (£265.6m) acquisition of US firm Valerus.
Kentz, which was the subject of a failed takeover approach earlier this year, had long said it wanted to grow its engineering arm in order to bid for more engineering, procurement and construction (EPC) contracts.
Oil and gas services provider Valerus is strongly positioned in the US onshore energy market, including shale gas. It also has a strong presence in Latin America, namely Brazil, Mexico, Colombia and Venezuela.
The deal will add around 7,000 people to Kentz’s 14,500 staff and will diversify the company’s client base.
The acquisition is expected to be earnings enhancing for Kentz in the first full financial year of ownership. It is understood that the firm expects the deal to add 20 cents, or 30 per cent, to earnings per share next year.
Kentz’s largest stakeholder Kerbet has already committed to vote in favour of the deal, ahead of a shareholder meeting on 2 January.
“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 [engineering] services for small and medium sized oil and gas processing facilities worldwide,” said chief executive Christian Brown. “It also provides us with a significant presence in the growing US market.”
Shares closed up 12.9 per cent in London, reaching 657.5p.
Investec is advising Kentz on its acquisition of US firm Valerus. Chris Sim, Duncan Williamson, George Price and Symmie Swil are the key players on the team.
Sim’s main focus is on the natural resources sectors. He previously worked at Barclays, BZW, CSFB and Evolution. He has worked on a broad range of transactions including initial public offerings, block trades, secondary issues, demergers, takeovers and buybacks.
Williamson was a key member of the team advising Kentz this summer on two takeover approaches. He joined Investec in 2007 from PwC. Since then he has worked on a range of deals with both private and public companies.
Price also advised Kentz on the recent bid approaches. He joined Investec in January 2012, having previously worked in the natural resources team at Evolution Securities. He has acted for a number of resource-focused companies including Circle Oil, Nautical Petroleum, Jupiter Energy and Afferro Mining.
Swil joined the Investec London team in April 2013, after spending three years in Investec’s Australian corporate finance team where she was involved in a range of transactions with a consumer, retail or gaming focus.