Hunting acquires Flexible Engineered Solutions (Group) Holdings Limited (FES), a leading provider of fluid transfer solutions to the offshore oil and gas and renewable energy industries, for £50 million.
Hunting, the precision engineering group, today announces that it has completed the acquisition of the entire issued share capital of FES, a company based in Ashington, Northumberland, United Kingdom, for a total cash consideration of £50m, on a cash free / debt free basis, and which is subject to customary post-completion adjustments.
Acquisition highlights and strategic rationale
The transaction represents an important step towards the delivery of the Hunting 2030 Strategy, strengthening Hunting’s growing offshore / subsea revenue profile and increasing the Group’s product coverage of deepwater and ultra deepwater markets:
- The transaction provides access to proprietary subsea fluid transfer technologies and system solutions for the offshore oil and gas and renewable energy industries, which are well-aligned to Hunting’s current customer base.
- FES’s portfolio of fluid transfer solutions are used in Floating Production Storage and Offloading vessels (“FPSOs”) and Subsea Distribution Systems (“SDSs”) and provides significant product bundling and cross-selling opportunities for Hunting’s other subsea businesses across key offshore regions.
- FES’s mission critical and highly engineered proprietary technology has driven robust growth and delivered a strong margin profile, which will be accretive to Hunting’s EBITDA margins.
- There is significant potential to grow FES’s existing international presence via Hunting’s global footprint in key customer locations such as Brazil, South East Asia, USA and West Africa.
- The addition of FES to the Group is expected to be earnings accretive in the first full financial year of ownership (before acquisition costs and normal acquisition adjustments such as fair value adjustments and the amortisation of intangible assets), as well as being highly cash generative.
The acquisition is in line with Hunting’s broader growth strategy, outlined at the Group’s Capital Markets Day in September 2023, which detailed its expansion into the subsea equipment sub-sector of the energy industry.
The acquisition has completed, with the consideration being funded from Hunting’s existing cash resources. FES is being acquired from members of its current management team, with the senior management team, comprising the principal sellers of FES, agreeing to remain with Hunting for at least twelve months post- acquisition.
FES will be integrated within Hunting’s Subsea Technologies operating segment and will report into Dane Tipton, the managing director of this operating segment.
Commenting on the acquisition, Jim Johnson, Chief Executive of Hunting, said, “We are pleased to complete the acquisition of FES. It immediately boosts our subsea portfolio with proprietary products and capabilities and clearly demonstrates progress on our Hunting 2030 Strategy.
“FES’s fluid transfer solutions perfectly complement our existing subsea and FPSO-related lines, creating strong product bundling and cross-selling opportunities with our existing subsea businesses as well as the potential for further international growth.
“FES’s blue-chip customer base, international profile and high margin, mission critical applications make the business an ideal fit for Hunting.”
