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Get out the paint brushes and needle guns, Time to paint some more boats red!
It's being reported that Technip is buying Global Industries for $936 million.
From the Wall Street Journal:
Bon Voyage for Technip and Global Industries
By ANDREW PEAPLE
Quelle surprise. Amid the deepening gloom for European stocks, French oil services company Technip S.A. has pulled off a $1.1 billion acquisition of Lousiana-based Global Industries, which specializes in oil infrastructure both on and under the sea. The price may be a little too friendly towards U.S. shareholders. But as oil companies move ever-more production offshore, it looks like the right strategic move.
Technip can comfortably afford Global Industries from its $1.8 billion net cash pile. Still, the price is a 55% premium to Global's close last Friday, valuing it at 8.9 times expected 2012 operating profit. That is the high end of the six to nine times range paid for such assets this year, according to Unicredit. Global's revenue slumped over 60% year-on-year in 2010, thanks to the drilling moratorium in the Gulf of Mexico. Its $95.7 million net loss last year included a $43.8 million impairment charge on one of its 14 vessels.
Still, Technip's $8-a-share purchase price doesn't look so bad considering Global traded at over $10 as recently as April. And the French company is playing into the trend for oil companies to look seawards for more oil. Global oil and gas production could be 38% offshore by 2025, up from 30% now, consultancy Rystad Energy estimates, with the increase coming from deepwater reserves. Tullow Oil's discovery of a potential 3.5 billion barrels of oil off the French Guiana coast last week is the latest significant offshore find this year.
Firms like Tullow need service companies to help with jobs from laying pipes to project management. Technip, with its more-international reach, can make better use of Global's assets. Two of Global's newest vessels can lay pipe using a technology Technip doesn't now have, increasing its potential market by 30%, the company estimates. Building up such capacity on its own would cost Technip over $600 million and take three years.
With synergies and increased sales, Global could provide Technip with a return on capital employed above its 15% target by 2014, Collins Stewart says. Technip's shares fell only 0.6% Monday, as European stocks fell another 2.3%. Investors are already rewarding this display of French courage.
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Replies to This Discussion
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Permalink Reply by Evan Palmer on
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hey mike,
I caught wind of this as well but I guess it has happened. I wonder if the operations and rostering contacts that where under Globals banner will be staying in there places and will still be valid ?!
Hope all as been treating you well.
Evan
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Permalink Reply by PAISTE on
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Technip is a French company. They favor IMCA. To all my brothers over there, get ready for the house cleaning.
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Permalink Reply by Mike Wolfe on
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@ Evan: I don't see how a change of ownership would invalidate contractual obligations.
@ Paiste: I don't see any "house cleaning" coming for Global. Do you think they would replace sat divers and hyperbaric welders that have years, even decades, of experience with red-hats just to have IMCA recognized hands? I too work for a French company. The company is member of IMCA and uses the IMCA logo on it's letterhead. I and most of my colleagues hold no IMCA recognized certs...yet. Technip is after Globals deep water assets. A GOM dive company just happened to be attached to them. Technip will probably pull a Stolt and hold the dive company for a few years, then sell them off.
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Veolia is all about profits. They would loose money if they brought things up to IMCA standards.
Technip is a major player, the O&G companies want safer practices from their diving contractors. The winds of change are coming.
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Another IMCA fanboy...
The point of ANY company is PROFIT. Neither Veolia nor any other company, IMCA or not, is in this game as a hobby or for altruistic motives. We are here to make money, for ourselves, and the fine people that invest in our companies, be it your fathers mutual fund, or some fat French bastard. That being said, Veolia has invested in some state of the art Vessels and some very nice IMCA compliant sat systems, all with dedicated HRCs. There are still several boats operating in the GOM without HRCs or with the bell designated as an HRC. It's a crying shame that the world economy has tanked, and Veolia is rethinking it's business model and trying to divest itself of the U.S. marine services division and other non core businesses. I have watched their stock go from about $80 a share down to $15. This is not due to the Marine Services performance, but many global factors. Their GOM efforts are a pimple on the ass of one of the largest and most profitable companies in the world.
Yes, the winds of change are coming and I welcome it. But I don't believe that necessitates throwing the baby out with the bath water. When the clients demand it, the GOM companies will find a way to work with IMCA and have their people and systems a****sed and audited. Sorry Chicken Little, I refuse to buy into the "The Sky is Falling" mentality. Maybe that will be my downfall. So be it. I was looking for a job when I found this one.
Yep, Technip is the major leagues. You or your friends ever work on the Seamec III or talk to someone that has?
I hope my standards don't get "raised" to that level.
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Well I take acception to being called "chicken little". And it's pretty nieve to think nothing is gonna change at Global. Sure, the key essential personnel will keep their jobs, but the fat will get trimmed. When they figure out they can pull cheaper divers in from other countries, they will do that. I don't like it, but it will happen. Remember what Superior did after Katrina? Performance will go down, but profits will go up. Then when no one will hire them any more, yes they will sell. It's very sad.
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Permalink Reply by Jeramy Towers on
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As of now Global is sold and Veolia is on the market to be sold~ So you two chatted about really nadda huh?
You two crack me up!
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Well Fat Boy! That is what a forum is all about! You coming up this weekend? The river is calling!
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Ha you skinny b****es can cakle all you want, the day you gain the knowlege I posess and the speed in which I complete my jobs safely is the day you can worry aboot my sexy body!
Chicken Little hahahahahah you kinda look like the charcter come to think of it~
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