© Supplied by Hunting Engineering group Hunting has acquired UK-based Flexible Engineered Solutions (FES) Group in a £50 million deal.
Hunting said the transaction represents an “important step” towards the delivery of its 2030 strategy, and will strengthen the firm’s revenue profile in the offshore and subsea sectors.
Northumberland-headquartered FES provides fluid transfer solutions to the offshore energy sector, with clients including Shell, BP and Equinor among others.
Hunting said the takeover gives it access to proprietary subsea fluid transfer technologies for the offshore oil and gas and renewable energy industries.
FES provides its portfolio of liquid transfer solutions for use in floating production storage and offloading (FPSO) vessels and subsea distribution systems.
Hunting said these will provide “significant product bundling and cross-selling opportunities” for its other subsea businesses “across key offshore regions”.
The takeover will also increasing Hunting’s product coverage of deepwater and ultra deepwater markets, the company said.
© Supplied by HuntingAlongside the North Sea, Hunting also operates across offshore markets across the globe.
As a result, Hunting said there is “significant potential” to grow FES’s existing international presence in key locations such as Brazil, South East Asia, USA and West Africa.
Hunting said it expects the acquisition will be “earnings accretive in the first full financial year of ownership” as well as being “highly cash generative”.
FES will be integrated within Hunting’s Subsea Technologies operating segment, the company said.
FES deal boosts Hunting’s subsea portfolio
Hunting chief executive Jim Johnson said the acquisition of FES “immediate boosts our subsea portfolio” and “clearly demonstrates progress” on the 2030 strategy.
“FES’s fluid transfer solutions perfectly complement our existing subsea and FPSO-related lines, creating strong product bundling and cross-selling opportunities with our existing subsea businesses as well as the potential for further international growth,” Johnson said.
“FES’s blue-chip customer base, international profile and high margin, mission critical applications make the business an ideal fit for Hunting.”
Elsewhere, Hunting also provided an update on the unaudited 2024 financial results of FES.
The Ashington-based firm generated revenue of £31.3m and EBITDA (earnings before interest, taxes, depreciation and amortisation) of £6.2m.
At 31 December 2024, FES recorded net assets of £33.1m and gross assets of £36.2m, with a sales order book of £11.8m and a tender pipeline and bid opportunities exceeding £100m.
Operating from a 35,000 square ft facility, FES employs 46 staff with operations mainly focused on the Gulf of Mexico, West Africa and South America.
‘Solid acquisition’ for Hunting, says analyst
Zeus Capital research director Daniel Slater said the £50m deal “looks like a solid acquisition for Hunting”.
“It represents a bolt-on to the company’s existing business, in a technically advanced and higher margin segment, with existing profits and a clear path to growth via Hunting’s distribution and customer networks,” Slater said.
“Deepwater is also a good place to be, in our view, given the significant developments going ahead in Guyana, potential upcoming developments in Namibia, and potential of a refocus by majors on new projects in the coming years as companies look to refill their development hoppers.”
Meanwhile, Panmure Liberum research director Ashley Kelty said it appears Hunting paid a “fair premium” for the acquisition based on FES revenue figures.
“However, given that it bolsters the overall [Hunting] offering with opportunities for cross selling of other products/service it could well be worth it in longer term,” Kelty said.
