ALS Ltd. (ASX: ALQ) has agreed to acquire Reservoir Group from SCF Partners, Reservoir management and other shareholders for a total consideration of approximately US$533 million (AU$579 million).
Reservoir is a global provider of specialist oil and gas services and equipment that assists with the evaluation, development and optimization of oil and gas discoveries.
The combined platform of Reservoir with ALS’ proven laboratory testing capabilities is expected, over time, to generate significant revenue synergies in a relatively fragmented and large market.
Separately, ALS has also agreed to acquire Earth Data Pty. Ltd. for AU$18 million (US$16.6 million). Earth Data is an Australian-based provider of niche sampling and analysis services to Australia's oil, gas and coal industries.
Completion of the acquisitions of Reservoir and Earth Data are subject to limited conditions precedent and are both expected to complete by early August 2013. The acquisition of Reservoir is conditional on ALS securing US antitrust approval and no material adverse change in Reservoir.
ALS noted that the acquisitions of Reservoir and Earth Data are consistent with its strategy to build an integrated global oil and gas solution that will significantly increase ALS’ presence in upstream oil and gas services, and that will increase the company’s exposure to high-growth conventional and unconventional oil and gas end-markets.