M&R unit acquires US firm for $5mComment on this story
MURRAY & Roberts’s (M&R’s) Australian-based oil and gas engineering and construction subsidiary Clough has bought US-based boutique engineering company CH-IV International for $5 million (R53.3m).
Clough became a wholly owned subsidiary of M&R in December last year when the JSE-listed construction firm acquired the remaining 38.4 percent shareholding it did not already own for R4.4bn.
Henry Laas, the group chief executive at M&R, said on Friday that the acquisition of CH-IV International was part of M&R’s strategy to grow its engineering capability in the operating platforms that were focused on the natural resources market sectors, which would be achieved through organic growth and small bolt-on acquisitions.
Earlier this year Laas said M&R’s international business was very attractive and a big part of the group’s new strategic future.
Laas said 70 percent of the group’s total revenue of R19bn and 80 percent of its total earnings before interest and tax (Ebit) of R669m in the six months to December last year was generated by the group’s international business platforms, with 50 percent of total revenue and 66 percent of Ebit generated by Clough.
He added that M&R’s construction Australasia oil and gas and minerals business platform “for now” comprised only the Clough business, but stressed the group would like to see more than one business in this platform. Laas confirmed at the time M&R had already identified a few targets and was in the process of assessing which of them were the more attractive options.
Kevin Gallagher, the managing director of Clough, said on Friday the acquisition of CH-IV International held strategic importance in enabling Clough’s expansion plans and was aligned with its strategy to build a globally competitive business to service its global oil and gas clients.
M&R said the North American liquefied natural gas (LNG) market had a strong outlook with good growth predicted from the burgeoning shale gas industry.
CH-IV International was an established technical leader and involved in 15 of the 22 current US LNG export projects and trusted by blue chip clients, it added.
M&R said CH-IV would bolster Clough’s LNG engineering, jetties and terminals, commissioning and brownfields capabilities and had strong LNG process and operational capabilities.
Its presence and expertise in the more developed US small and midscale LNG and shale gas markets would facilitate entry for Clough into these markets as they developed globally, it said.
M&R added that CH-IV would also provide Clough with expertise for projects.