According to a report on Reuters this week, Stanley Black & Decker (SWK.N) said it had acquired a very large pipeline equipment & services supplier, CRC-Evans International, for $445 million in cash. CRC-Evans International manufactures equipment and supply services to the pipeline industry. Their primary products and services include pipeline construction equipment, automatic welding systems and providing managed subsea services, joint coating and heat treatment, non-destructive testing, pipe weighting systems, laybarge equipment, conveying systems and concrete weight coating. The purchase was made from a group of investors that was led by private-equity firm Natural Gas Partners. The intent, according to the brief report, was to expand Stanley Black & Decker’s infrastructure solutions business.
The report said that this acquisition would (eventually?) add to the company’s earnings, adding over 10 cents to earnings by the third year according to Stanley Black & Decker. The company also said that the deal wouldn’t increase the company’s year-end debt since it would be funded with Stanley Black & Decker’s existing sources of liquidity (cash and assets).
Since about 80 percent of CRC-Evans’ revenues are derived from onshore natural gas pipeline equipment and services, an interesting consideration is what effects today’s almost manic pursuit (at least on legislative paper) on non fossil fuel energy sources will have on business like this in the not-so-distant future.
Shares of the company closed at $57.23 Thursday on the New York Stock Exchange.
