Infrastructure protection specialist Aegionannounced yesterday that it was acquiring maintenance, contraction, and engineering firm Brinderson for $150 million and that the deal will close on July 1.
Brinderson primarily focuses on the oil and gas industry by providing major refinery maintenance, repairs, and retrofits, but it derives approximately 75% of its revenues from recurring activities developed through long-term contracts and nearly 40 master service agreements. For the 12-month period ending March 31, Brinderson's generated revenues totaling approximately $231 million and adjusted EBITDA was $23.8 million.
Aegion President and CEO J. Joseph Burgess said: "Following the acquisition, Aegion's energy and mining revenues from recurring operating and maintenance activities are expected to exceed 50%, compared to 45% prior to the acquisition. This transaction marks the beginning of a strategic effort to expand our capabilities in this important sector of the United States energy market."
Aegion has executed an amendment to its current credit facility to permit the transaction but is working with its senior lending partners -- Bank of America, JPMorgan Chase, and U.S. Bank National Association -- to put in place a new and expanded credit facility. It is anticipated that the new facility will fund the transaction and also provide sufficient flexibility for Aegion's future liquidity needs and growth prospects.
The acquisition is expected to be modestly accretive to Aegion's earnings per share this year, leading it to maintaining its previously issued guidance for 2013. It said EPS would be in the range of $1.60 to $1.80, excluding $4 million to $7 million in pre-tax acquisition-related expenses.
The article Aegion to Acquire Oil and Gas Services Provider originally appeared on Fool.com.
Fool contributor Rich Duprey has no position in any stocks mentioned. The Motley Fool recommends Bank of America and owns shares of Bank of America and JPMorgan Chase. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.