Dec 22 2005
Through its Engineered Systems business area, Trelleborg has entered into an agreement to acquire the CRP Group, an engineering company with annual sales of slightly more than SEK 1,000 M and 500 employees, primarily in the UK and the US. This will make Trelleborg a global market leader in polymer systems and solutions for offshore oil and gas projects.
“With CRP, we will be gaining a significant foothold in one of our prioritized growth segments, which we view as highly attractive for the future,” says Peter Nilsson, Trelleborg’s CEO. “We have been following CRP for some time and are delighted to now reach an agreement regarding the acquisition of this global leader and its extensive technological and market expertise. This acquisition will additionally increase our focus on profitable segments and further improve the balance in the Group.”
CRP’s operations relate primarily to systems for the subsea sector of the oil and gas business, an area that is expected to grow considerably faster than the oil and gas market in general. The company is active in systems for seismic surveys, drilling operations and subsea production, with solutions for deepwater flow assurance and buoyancy systems, as well as many specialized engineered polymer-based solutions. As a result of the acquisition, oil and gas related operations within Trelleborg will increase to 7-8 percent of total Group sales. The acquisition is expected to provide synergies with existing operations in such areas as sales/marketing and technical development.
The purchase price totals approximately SEK 970 M in the form of cash and through the assumption of loan-repayment obligations.
“CRP has a good earning capacity, and it is our ambition to improve it further” says Lennart Johansson, President of the Trelleborg Engineered Systems business area. “Its order backlog for 2006 is at a good level and we believe the market will be strong over the next few years. However, it is important to remember that this business are almost entirely project-related, which entails great variation in order bookings and consequently also in invoicing between different quarters.”
CRP was founded in 1974 and is currently controlled by Barclays Private Equity. The company has five production units in Skelmersdale (also head office) and Barrow-in-Furness, in the UK, as well as in Randolph and Canton, Massachusetts, and Houston, Texas, in the US. Sales and marketing offices are located in important offshore areas.
The acquisition is expected to be completed in January 2006, and is conditional on certain requirements being fulfilled.