Aker Solutions said it has agreed to buy oil-services provider Reinertsen in an asset deal set to be concluded in the second quarter, giving Aker Solutions ownership of Reinertsen's Norwegian oil and gas services business. The purchase price is NOK 212.5 million (roughly $25 million).
The agreement excludes Reinertsen's liabilities as of December 19, 2016, when the company went into debt negotiation proceedings.
Reinertsen, the third-largest maintenance and modifications supplier offshore Norway with about 700 employees, has its main offices in Trondheim and Bergen, where Aker Solutions (AKSO.OL) also has a presence. The company's order backlog contains maintenance and modifications contracts with Statoil, including a minimum six-year framework agreement awarded in December 2015. It also has some smaller subsea services and engineering contracts.
"Combining our capabilities will boost our presence in the Norwegian maintenance and modifications market, helping to safeguard core competencies at key locations and positioning us for a market recovery," said Luis Araujo, chief executive officer of Aker Solutions. "Our companies also have a history of collaborating offshore Norway that we will build on to the benefit of our customers."
The companies worked together from 2002 to 2010 on projects offshore Norway through the Aker Reinertsen joint venture. Reinertsen employees in Trondheim and Bergen will be moved to local Aker Solutions offices as part of synergies to be generated.
"We're glad to have found a new home for our oil and gas business after a very difficult time for our company," said Thomas Reinertsen, deputy CEO of Reinertsen. "Short term we still face some challenges, but in the longer term this move will secure jobs in central Norway and enable us to continue our strong tradition of delivering high-quality services."
Reinertsen had revenue of about $94 million in 2016 and is expected to contribute positively to Aker Solutions' earnings from 2018.
"We welcome the Reinertsen employees to Aker Solutions and expect the integration of our two businesses to further strengthen our leading project execution," said Araujo. "While the global oil-services market remains challenging, we are seeing some signs of improvement, particularly in the brownfield segment."
The acquisition is subject to approval by the Norwegian competition authorities.