French subsea specialist oilfield services firm Technip is to purchase subsea construction and pipe laying specialists Global Industries for $1.07 billion.
Technip will pay $8 cash for every outstanding share of Global, a 55% premium over the closing share price on Friday. The $1 billion price tag includes assumption of $136 million in debt.
“The acquisition of Global Industries reinforces Technip’s leadership in subsea, one of our three market segments alongside onshore and offshore,” said Thierry Pilenko, Chairman and Chief Executive Officer of Technip, in a statement.
The subsea market – which includes undersea pipelines and sea floor production and processing equipment – is likely to have a very strong year in 2011, Pilenko said.
“Our own backlog at end-June 2011 is above its previous peak. We see that our customers continue to firm up a substantial number of large offshore developments with Brazil, the Gulf of Mexico, West Africa and Asia Pacific leading the way to drive future growth,” he said.
Global is based in Carlyss, La. but has its international headquarters in Houston. It has 2,300 employees and operates 14 ships, ranging from subsea pipe laying vessels to heavy-lift vessels.
Technip has 23,000 employees and currently operates 20 ships involved in offshore construction. Before this deal Technip lacked vessels with “S-lay” capabilities for laying pipelines. That process involves using vessels with large underwater tressels that help guide a continuously welded string of pipe to the sea floor.
Global has two new s-lay vessels, the Global 1200 and Global 1201, which can lay 60-inch diameter, concrete-coated pipelines in nearly 10,000 feet of water.
There are roughly $30 million in “cost synergies” between the two companies, meaning there is relatively little overlap in assets and large cuts in personnel are unlikely.
The deal is expected to close in 2012.