Smiths Group plc (“Smiths Group” or the “Group”) today announces that it has entered into an agreement to sell its Artificial Lift business (“Artificial Lift”), part of the John Crane division, to Endurance Lift Solutions, LLC. The total gross consideration payable at completion is $39.5m in cash subject to an adjustment based upon the working capital position at completion.
Artificial Lift is engaged in the sale of products and services, principally sucker rods for onshore upstream oil and gas customers in the United States and Romania.
For the year ended 31 July 2015, the business and assets subject to the transaction had combined revenues of $90.8m and an operating loss before certain non-recurring items of $1.8m. The gross assets of the combined business at 31 July 2015 were $63.2m.
For the unaudited year ended 31 July 2016, the business and assets subject to the transaction had combined revenues of $53.4m and an operating loss before certain non-recurring items of $10.1m. The gross assets of the combined business at 31 July 2016 were $32.1m.
The management team will transfer with the business. The transaction is subject to customary regulatory approvals and is expected to close by the end of the calendar year.
Andy Reynolds Smith, Chief Executive of Smiths Group, commented as follows: "This disposal demonstrates our ongoing commitment to increasingly focus our portfolio on building technology differentiated leadership positions in our chosen markets. The capital released from this transaction will be reinvested in attractive growth opportunities, whilst allowing the Artificial Lift business to progress under different ownership."
PPHB, an independent investment banking firm focused on the energy services sector, acted as exclusive financial advisor to Smiths Group in the sale of Artificial Lift.