Offshore oilfield equipment manufacturer
FMC Technologies Inc.
) entered into an agreement to acquire Pure Energy Services Ltd.
for a cash consideration of C$11.00 per share, which comes to a
total of C$282 million or US$285 million.
FMC TECH INC (FTI): Free Stock Analysis Report
PETROBRAS-ADR C (PBR): Free Stock Analysis
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The acquisition will be executed by way of a plan of Arrangement in
line with the Business Corporations Act of Alberta. The transaction
will be completed following the approval of the shareholders of
Pure Energy along with the consent of the Court of Queen's Bench of
Alberta and relevant regulatory authorities. The meeting by the
stakeholders of Pure Energy will likely take place in mid-October.
Calgary-based Pure Energy acts a leading provider of frac flowback
services, apart from being an established wireline services
provider with operations in multiple field locations across Canada
and the United States.
This acquisition is part of FMC's strategy of expanding shale
related business that will be an added benefit to the company's
existing products and services of the Surface Technologies segment.
This collaboration will enable FMC to provide an integrated well
site solution and other services that will enhance the customer
Houston, Texas-based FMC is a leading manufacturer and supplier of
technology solutions for the energy industry, which operates 27
manufacturing facilities in about 16 countries.
Late last month, FMC reported second-quarter 2012 diluted earnings
per share of 46 cents, slightly below the Zacks Consensus Estimate
of 48 cents. However, comparing year over year, FMC's earnings per
share improved by a handsome 18.0% - from 39 cents to 46 cents - on
the back of strength in subsea and surface systems orders. Revenues
at $1,494.9 million were up 21.6% year over year and were also
above the Zacks Consensus Estimate of $1,486.0 million.
FMC shares currently retain a Zacks #3 Rank, which translates into
a short-term Hold rating. We are also maintaining our long-term
Neutral recommendation on the stock.
We believe that FMC remains well positioned particularly in the
subsea systems market. Earlier, in March, the company signed a
four-year subsea equipment supply pact with Brazilian oil biggie
Petroleo Brasileiro S.A.
But, with markets remaining competitive and pricing likely to be
weak, we expect FMC shares to perform in line with the broader