Business News
Dresser-Rand Announces Acquisition Agreement with Peter Brotherhood
Wednesday 02. July 2008 - Dresser-Rand Group Inc. ("Dresser-Rand" or the "Company") (NYSE:DRC), a global supplier of rotating equipment, announced today that its newly formed UK subsidiary has entered into an agreement to acquire certain assets of Peter Brotherhood Ltd. The acquisition is expected to be completed by July 1, 2008.
Peter Brotherhood specializes in the design and manufacture of steam turbines, reciprocating gas compressors, gas engine packaged combined heat & power systems (CHP), and gearboxes. The company’s primary clients are in the worldwide oil and gas industry, specifically marine and floating production, storage, and offloading (FPSO), refinery, petrochemical, combined cycle/co-generation, and renewable energy industries. Peter Brotherhood, with a manufacturing facility in the United Kingdom, traces its beginnings to 1867. It has an installed equipment base estimated at approximately 750 units.
The Peter Brotherhood business had sales of approximately pounds Sterling 50.5 million (British Pounds) in fiscal year 2007.
This acquisition is consistent with Dresser-Rand’s business strategy, which focuses on acquisitions that strengthen and enhance its core capabilities, add new products, services, and technologies, and provide access to new markets or enhance current market positions. The acquisition is complementary to Dresser-Rand’s products and services strategies, strengthens the company’s position in the European served area (especially for reciprocating compressors), and increases the size of the company’s industry-leading installed base of equipment.
Under the agreement, Dresser-Rand will acquire the Peter Brotherhood assets for approximately pounds 31.1 million net of cash acquired. The agreement includes the potential for additional consideration based on a Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA) earn-out for the fiscal year ended November 30, 2008. The earn-out is up to a maximum of pounds 16.3 million, which would be achieved if the EBITDA for the fiscal year ended November 30, 2008 is at least pounds 6.0 million. The agreement also includes a price adjustment based on the net operating assets at closing.
The acquisition is expected to be neutral to earnings in the first year and accretive thereafter.
“Dresser-Rand and Peter Brotherhood have decades of experience providing innovative solutions in the energy conversion markets,” said Vincent R. Volpe Jr., President and CEO of Dresser-Rand. “Both companies have maintained solid reputations for quality, efficiency, economy, and reliability.”
Volpe said, “Leveraging these attributes and combining technical expertise, research and development capabilities, and our combined worldwide sales presence will enable us to offer a comprehensive line-up of steam turbine and reciprocating gas compressor products backed by outstanding OEM parts and service.”
Stephen Fitzpatrick, the Managing Director, of Peter Brotherhood commented, “Dresser-Rand recognized the success we have forged by a clear set of values focusing on customer care and satisfaction and the delivery of great products by a highly motivated and successful workforce. We are equally proud to be associated with Dresser-Rand.”