Kentz hits all-time high after winning access to US oil and shale

A $435 million cash deal to get access to oil and shale businesses in the US and South America helped engineer Kentz spurt nearly 10 per cent today.

The oil and gas services-focused engineer and construction group is to buy Valerus Field Solutions — giving investors reason to pile in. Valerus will provide Kentz access to the US oil and shale markets as well as business in Venezuela, Colombia and Mexico.

The deal helped Kentz gush 58p to 640.5p — taking it to the top of the mid-tier table. Mike van Dulken, head of research at Accendo Markets, said the share price rise was “not the normal market reaction, given that acquisitions involve integration and execution risk”, but the fact that “this one is big [33.3 per cent of revenues] and is set to be earnings accretive from year one” is why it is being welcomed by investors.

The jump in share price today pushed Kentz to an all-time high, past the 580p a share offered by Amec in the summer. Kentz turned down Amec’s approaches, and rival bidder German group M+W also walked away, which disappointed investors at the time. The Valerus deal should complete in January, after shareholder approval is received.