Kentz to buy US firm Valerus for $435m

Irish engineering group Kentz said today it had agreed to acquire U.S.-based Valerus Field Solutions for $435 million in cash, to expand its engineering capability and presence in Latin America.

Kentz, a specialist construction company focused on oil and gas, mining and infrastructure, which was itself a takeover target earlier this year, had long said it wanted to grow its engineering arm in order to bid for more engineering, procurement and construction (EPC) contracts.

“We’ve found a very strong and agile business with a strong culture that fits our own, so we’re pleased to have found it,” Kentz Chief Executive Chris Brown told Reuters.

Brown said the acquisition would give Kentz access to the U.S. market for both conventional oil and shale, as well as to Latin America, with Valerus established in Venezuela, Colombia and Mexico.

The deal adds about 700 people to Kentz’s 14,500 employees with a focus on expansion rather than synergy savings.

“There’s very little if any integration necessary here … no synergies (are) needed to make the deal work,” Brown said.

Valerus made core earnings (EBITDA) of $51.5 million on revenue of $492.9 million last year, Kentz said in the statement.

EY Ireland acted as advisers to Kentz in relation to the debt financing for the $435 million acquisition. Graham Reid who led the EY team commented: “We are delighted to have been able to assist Kentz on this important strategic acquisition which is consistent with Kentz’s strategy of establishing itself as a recognised market leader in providing highly skilled process engineering, EPCM and EPC services for small and medium sized oil and gas processing facilities worldwide.” Source: Reuters.