General Electric snapped up the UK oilfield services technology company Sondex for nearly £290m in cash yesterdayto increase its exposure to the fast-growing oil & gas support services sector.
Sondex said last week that it was in talks with a potential buyer for the business after recording rapid growth since it listed shares in 2003. GE, the US conglomerate, has paid 460p cash for each Sondex share, a price that compares with a flotation price of 100p.
A counterbid for Sondex is possible with the well-regarded oilfield services company potentially attractive to a variety of buyers in the oil sector, including its UK rivals Hunting and Expro. However, Sondex had evaluated two bids for the business and sounded out other potential buyers before accepting GE's offer.
The bid is pitched at a 35 per cent premium to Sondex's share price prior to the announcement it was in talks with a buyer. GE, which will integrate the company into its Optimization and Control division, has rec-eived support from shareholders representing 44 per cent of Sondex's capital, with 6.4 per cent providing irrevocable undertakings.
Sondex develops and manufactures electro-mechanical equipment used in oil and gas fields such as drilling and transport tools as well as more sophisticated devices that measure well performance and the quality of the oil being mined. The company has embarked on a series of acquisitions since it listed in 2003, including the Aberdeen-based Geo-link, Bluestar in Canada and the Texan company Ultima Labs.
The integration into GE's business will enable the company to tap into fast-growing markets around the world, in particular China where the company has a fledgling operation, and Russia. The company's existing management team led by Mark Perry, the chief executive of Sondex, will stay on after the acquisition is complete. Last year Sondex notched a 33 per cent increase in revenue to nearly £70m, with pre-tax profit rising 14 per cent to £8.5m. In June, it said that orders had risen 20 per cent on the previous year due to strong demand in China and Russia.
In contrast, GE's Optimization and Control unit, which has never acquired a company outside the United States before, recorded revenue of $1.1bn.Reuse content