Sign up Australia
Proactive Investors - Run By Investors For Investors

Valmec poised to acquire complementary oil and gas services business

The acquisition of APTS is expected to expand client base and boost earnings in fiscal 2018.
Picture of piping system
Acquisition of APTS increases prospect of attracting multinational oil and gas groups

Valmec Ltd (ASX:VMX) a provider of services and equipment to the heavy industrial sector has entered into an agreement to acquire APTS Pty Ltd which has similar industry exposure.

The agreement is being negotiated with the receivers & managers of APTS Pty Ltd.

Should the acquisition be ratified Valmec will acquire the group’s plant and equipment, work in hand, inventory, intellectual property, licenses and accreditations.

The acquisition is to be funded from working capital and additional debt facilities and would not warrant and earnings per share dilutive capital raising.

APTS offers established client base and recurring revenues

APTS is a provider of non-destructive testing services and hydrostatic and pneumatic pressure testing to the Australian oil, gas, power and water industries.

The company has generated average annual revenues of $20 million over the past four years.

There are currently long term service contracts in place to the value of $5 million with oil and gas clients, with a tender pipeline relating to established clients of $13 million.

APTS’s client base includes multinationals such as Chevron, Woodside Petroleum, Shell and Origin Energy.

Acquisition expected to be earnings per share accretive in fiscal 2018

Valmec expects the APTS business to deliver underlying earnings returns of circa 10% should the anticipated synergies that exist between the two businesses be realised.

In terms of confidentiality provisions in the BSA, Valmec is unable to disclose the proposed purchase price, but confirmed that the acquisition would be cash funded.

The acquisition is expected to be completed in expected to be earnings per share accretive in fiscal 2018.

View full VMX profile View Profile

Valmec Timeline

Newswire
December 17 2014

No investment advice

The information on this Site is of a general nature only. It does not take your specific needs or circumstances into consideration, so you should look at your own financial position, objectives and requirements and seek financial advice before making any financial decisions. You acknowledge and understand that neither the Company, its related bodies corporate, the information providers or their affiliates will advise you personally about the nature, potential value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter. You should read our FSG and any other relevant disclosure documents and if necessary seek persona advice prior to making any investment decision.

You understand and agree that no Content (as defined below) published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person.

You understand that in certain circumstances the Company, its related bodies corporate, the information providers or their affiliates may have received, or be entitled to receive, financial or other consideration in connection with promoting, and providing information about, certain entities on the Site and in communications otherwise provided to you.

You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate. From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

Before you act on any general advice we provide, please consider whether it is appropriate for your personal circumstances.

© Proactive Investors 2018

Proactive Investors Australia PTY LTD ACN:132787654 ABN:19132787654.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use