News | May 12, 2014

ShawCor Ltd. To Acquire Desert NDT LLC

Toronto - ShawCor Ltd. (ShawCor) rently announced that it has entered into a definitive purchase agreement to acquire all of the outstanding shares of Desert NDT LLC ("Desert") for a total consideration of approximately US$260M. Desert is a Houston-based provider of non-destructive testing ("NDT") services for new oil and gas gathering pipelines and infrastructure integrity management services. Desert operates through 18 branches located in major U.S. oil and gas basins and its trailing twelve month EBITDA is in excess of US$33M with operating income of approximately US$22M.

The transaction is subject to U.S. regulatory approval and is expected to close in the third quarter of 2014. The acquisition will be funded with cash and through available revolving credit facilities. Post-closing, ShawCor may consider raising equity to repay a portion of its outstanding revolving debt. The transaction is expected to be accretive to ShawCor's earnings per share within the first 12 months.

Mr. Steve Orr, President and CEO of ShawCor stated that: "We are very pleased to welcome Desert to the ShawCor family. Desert's NDT offering is expected to increase ShawCor's exposure to the growing unconventional oil and gas production in the United States, and to complement the business of Shaw Pipeline Services, ShawCor's NDT business unit. The acquisition of Desert will also be a vehicle to advance our integrity management strategy of providing management and data centric solutions for our customer's production, processing and pipeline assets. Desert's integrity management business complements our recent investments in Zedi and Vintri and is anticipated to provide ShawCor the foundation to generate recurring revenue from our customers' operating expenditure budgets".

SOURCE: ShawCor Ltd.

Newsletter Signup
Newsletter Signup
Get the latest industry news, insights, and analysis delivered to your inbox.
Join your peers