Prysmian Group has signed an agreement to acquire 100% of the privately-held US company Gulf Coast Downhole Technologies (GCDT) for an initial consideration, subject to adjustment, of approximately $45 million in cash.
The transaction involves an earn-out determined on an average combined EBITDA in the next three years and for a maximum earn-out payment of about $21 million.
Based in Houston, GCDT is active in the design and supply of downhole equipment for the Oil & Gas industry, with a turnover of approximately $ 34 million in 2014. GCDT products are installed in oil and gas wells around the world and consist of integral components in the systems that provide downhole control, injection, flow assurance and monitoring.
GCDT fits fully into the Group’s expansion strategy in the business of Subsea Umbilicals, Risers and Flowlines (SURF) and complements its Draka-branded DHT offered product range, Prysmian noted.
“Thanks to the integration between our SURF-DHT business and GCDT, Prysmian Group will be able to accelerate growth in an attractive high-value, high-ROCE (Return on Capital Employed) business and increase exposure to high-tech segments,” states Prysmian Group CEO Valerio Battista. “We also aim to improve customer proximity by leveraging our global footprint and bringing GCDT’s innovation capabilities to a broader customer base. Integration of the two brands is key for the development of an enhanced and versatile supply chain,” he adds.
Roy Torrance, President of GCDT comments: “The acquisition of GCDT by the Prysmian Group recognizes the unique know-how and expertise developed within GCDT and by using our combination of strengths it presents a great opportunity for the continued growth of GCDT which will benefit our customers on both domestic and international levels.”