Hunting PLC (LSE:HTG) has acquired Dearborn Precision Tubular Products, a company that provides specialist precision machining services, for a total cash consideration of US $83.5 million. The consideration paid is on a cash free debt free basis and will be funded from Hunting's existing cash and bank borrowing facilities.
Dearborn manufactures high precision tubular and rotating metal components for customers who require products with exacting tolerances and unique configurations. The components are used primarily for MWD/LWD applications in the oil and gas sector, in addition to products for the aerospace and power generation industries. The business will contribute to Hunting's Well Construction range of products and services.
Dearborn was one of the acquisitions, whose aggregate consideration amounted to around £90m, that was referred to in the announcement of the acquisition of Titan.
Located in Fryeburg, Maine, USA, Dearborn was formed in 1977 and employs around 225 personnel. Dearborn operates from one facility providing over 140,000 sq. ft of production, storage and office accommodation.
For the year ended 31 December 2010 Dearborn's revenue was US$44.5m (£28.7m), profit before taxation was US$7.4m (£4.8m) with EBITDA of US$9.1m (£5.9m). Dearborn's net assets and gross assets as at 31 December 2010 were US$44.0m (£28.0m) and US$47.0m (£29.9m) respectively.
Dearborn has continued to perform well for the six months ended 30 June 2011 with the unaudited US GAAP management accounts reporting revenue and EBITDA of US$24.6m (£15.2m) and US$7.8m (£4.8m) respectively..
The acquisition of Dearborn is expected to be earnings enhancing in the first full financial year before acquisition costs and normal acquisition adjustments such as fair value adjustments and the amortisation of intangible assets.
Hunting is acquiring Dearborn from a company owned by three individual investors, one of whom is Dearborn's President who will remain with the business after the acquisition.
Hunting buys Dearborn Precision Tubular for $83.5MM