TTS Group ASA has agreed to sell its drilling equipment business, a part of TTS Energy Division, and relevant subsidiaries, to Cameron International Corporation (NYSE: CAM) for $270 million, plus a turnover based earn-out model for a three-year period.
Offshore Handling (cranes and winches), which is also a part of the TTS Energy division, is not included in the divestment.
TTS says the transaction strengthens the group financially and enables it to focus upon further growth and development. After the transaction, TTS Group will consist of TTS Marine, TTS P&L and Offshore Handling.
The transaction before earn out will give TTS Group a profit approximately NOK 300 million and is expected to close in the second quarter of 2012. The transaction is subject to customary closing conditions, including approval from the relevant competition authorities.
TTS says the divestment is "industrially right for both the group as whole and for its drilling equipment business unit."
"The offshore industry is moving towards larger, more integrated units, offering a broader scope of services. Cameron, with its global sale- and service network, will be a good owner and is in a better position to further develop our drilling equipment business", says TTS President and CEO, Johannes D. Neteland.
With the divestment, TTS Group will depart the drilling equipment industry, both offshore and onshore. TTS Group will however retain and continue to develop and grow Offshore Handling (cranes and winches), which is not included in the sale.
Growth opportunities TTS Group ended 2011 with the highest full year operating result ever, were mainly driven by the strong results in the Marine division."We expect the shipping industry to move towards a considerable restructuring after several years of recession and TTS Group is now favorably positioned to participate in the further development", says Mr. Neteland.
April 18, 2012