Industrials sector comment – January 2011

Date

On the back of its recent £2bn acquisition of Dresser, GE has succeeded in its move for Wellstream.

The acquisition of the UK group demonstrates two important features of the acquisition strategy within GE Oil & Gas. The £880m transaction emphasises the important of access to the deepwater drilling market and, possibly more significantly, the importance of having a presence in emerging markets.

Wellstream is a developer and manufacturer of flexible pipeline products for oil and gas transportation in the susbsea production industry. The group derives a significant proportion of its income from its operations in Brazil, where one of its two manufacturing operations is located. The acquisition of Wellstream will therefore provide GE with crucial access to the deepwater exploration and drilling market in Latin America. It will also reinforce GE’s relationship with Petrobras, the fast-growing Brazilian oil and gas group.

Deals

Halma plc has acquired Accudynamics Inc(ADI), a US manufacturer of components for the medical diagnostic devices market. ADI’s products include electromechanical assemblies, fluid handling components and pumps which will expand Halma’s portfolio within its Health and Analysis sector within the group’s Fluid Technology unit.

Mitsubishi Heavy Industries Ltd (MHI) has acquired Artemis Intelligent Power Ltd, a UK developer of hydraulic power drive technology. Artemis’ technologies are integrated into energy systems such as wind turbines and engines used for power generation, as well as power products for the railway and shipbuilding markets. Its range of products includes high-capacity, high-speed, digital-controlled solenoid valves that have applications in offshore wind energy applications.

Fiberweb plc has acquired Boddingtons International Ltd, a UK manufacturer of geosynthetic nets and accessories for use in civil engineering and ground protection. The acquisition complements Fiberweb’s Terram business and will allow the group to penetrate the market for needlepunch geotextiles.

BAE Systems plc has acquired ETI Holdings AS, a Danish provider of defence and military intelligence services. The £137m acquisition will expand BAE’s range of cyber and intelligence technologies.

CoorsTek Inc has acquired Flowguard Ltd, a UK producer of hydro-pneumatic pressure vessels used in caustic, high temperature, high pressure and hygienic environments. Flowguard’s range of products includes pulsation dampeners, suction stabilisers and surge absorbers for use in chemical, food and beverage, pharmaceutical and subsea applications. The business will complement CoorsTek’s heavy-duty pulsation mitigation equipment for the oil and gas industries and expand the US group’s presence in the European market.

Petrofac plc has acquired a 20% stake in Gateway Storage Co Ltd (Gateway), the developer of the Gateway Gas Storage project in the East Irish Sea. Petrofac will join Gateway as the technical project operator jointly responsible for developing the project which from 2016 will add nearly 30% to the current gas storage capacity in the UK.

Leyland Holding Ltd has acquired Hulme Group Ltd, a UK provider of maintenance and repair services for commercial vehicles. Hulme, which had been in administration, complements Leyland’s existing commercial vehicle services.

Autobrokers Ltd has acquired Overfinch Bespoke Vehicles Ltd, a UK provider of performance vehicle enhancement services. Overfinch was acquired from administration and secures Autobrokers’ position at the largest supplier of Overfinch vehicles in the UK.

RPM International Inc has acquired Pipeline & Drainage Systems Ltd, a UK supplier of bridge, curb and channel drainage products for construction and infrastructure industries. The acquisition will be integrated into the US group’s Performance Coatings Group where it will complement the previous acquisition of Universal Sealants Ltd, a UK supplier of coatings and construction products for bridges and large infrastructure projects.

John Wood Group plc has acquired PNS Ltd, a UK provider production services to the oil and gas industry. The £600m acquisition will reinforce John Wood’s position in the market for brownfield production services with specialist expertise in asset integrity commissioning, decommissioning pre-operations support and training.

Trelleborg AB has acquired PPL Polyurethane Products Ltd, a UK manufacturer of polyurethane products for the infrastructure and offshore oil and gas industries. PPL’s range of products includes bend stiffeners, cable protection products and damping solutions.

RPC Group plc has acquired Superfos Industries AS, a Danish manufacturer of injection-moulded plastic packaging for the chemicals, food and paint industries. The acquisition will reinforce RPC’s position as one of the leading manufacturers of rigid plastic packaging in Europe.

Nibe Industrier AB has acquired Thermtec Ltd, a UK manufacturer of electrical water heating products. The target will be integrated into Nibe’s existing operations in the UK.

Dieselec Generators Ltd has acquired Thistle Generators Ltd, a UK supplier of gensets and standby power systems. The transaction has been completed by way of a pre-pack administration of Thistle Generators and with the support of Dieselec’s private equity backer, Nevis Capital.

PSM International Holdings Ltd has acquired BAS Components Ltd from TT Electronics plc for £4.4m. BAS Components is a manufacturer and distributor of fasteners, nuts and studs for automotive and other general industrial applications.

Cooper Industries has acquired Hernis Scan Systems AS from Vislink plc for £32.5m. Hernis Scan Systems is a Norwegian manufacturer of CCTV equipment which will reinforce Cooper Safety’s presence in the marine, oil and gas and petrochemical industries.

General Electric Co has acquired Wellstream Holdings plc, a UK designer and manufacturer of flexible pipeline products for the oil and gas industry. The £800m acquisition will be integrated into GE’s Oil & Gas division which supplies a wide range of surface and subsea drilling and production systems including compressors, high pressure reactors, power generation systems, turbines and turboexpanders.

Weir Group plc has acquired a 76% stake in Ynfiniti Engineering Services SL, a Spanish provider of operating and maintenance services for the wind turbine industry. The acquisition will form part of Weir’s Power & Industrial Division where it will strengthen the division’s ability to provide maintenance and upgrade services to onshore and offshore wind farms.