GE has announced that it is to make an offer for Wellstream Holdings, a manufacturer of flexible pipeline products for oil and gas transportation in the subsea production industry.
The terms of the transaction, which value Wellstream’s share capital at £0.8bn ($1.3bn), offer Wellstream shareholders £7.80 in cash per Wellstream share and a special dividend of £0.06 in cash per Wellstream share.
The transaction, which the board of Wellstream intends to unanimously recommend to its shareholders, is expected to complete in the first quarter of 2011 − subject to acceptance by shareholders and customary closing conditions.
With double-digit growth expected in deepwater spending annually for the next five years, the addition of Wellstream is expected to broaden GE Oil and Gas’s subsea production systems equipment and service capabilities.
Wellstream operates two manufacturing facilities in Newcastle, UK, and Niterói, Brazil, employing approximately 850 staff.
For the year ended 31 December 2009, Wellstream reported revenues from continuing operations of £386m and operating profit from continuing operations before exceptional items of £51m.
The company also reported a sales backlog of £250m as of 16 November 2010.