FMC's deal aimed at extending shale reach – Houston Chronicle
Houston-based FMC Technologies announced a deal Monday to expand its reach into oil and gas shale fields with the $285 million cash purchase of Pure Energy Services.
Pure Energy is based in Calgary, Alberta, and operates throughout Canada and the United States. Its shareholders are expected to vote on the deal in October.
FMC Chairman and CEO John Gremp said the acquisition is part of the company's plan to build its shale-related business.
"By combining the products and services of both companies, we will provide an integrated well site solution which creates client value," he said in a prepared statement.
FMC Technologies spun off from its parent company, FMC Corp., in 2001 and is focused solely on energy; about two-thirds of its revenue comes from subsea technology.
Company spokesman Michael King said expanding the shale side of the company is one of Gemp's goals. He said FMC has not committed to other specific acquisitions, "but we always have our eye out for something that is attractive, if it adds value for our customers, our shareholders."
Pure Energy provides flowback services at hydraulic fracturing sites - handling the fluids produced after the well has been fractured - as well as wireline services.
Wireline services involve running wire into the well to set flow control or otherwise manage the well.
UBS analyst Angie Sedita said in a note to investors that the transaction is consistent with FMC's strategy of expanding its shale-related businesses.
"In our view, although this is a relatively small deal, the acquisition adds more frac-shale exposure which distracts from FMC's core strengths in the ... subsea business," she wrote.
The purchase price of $11 per share (Canadian), about $11.12 per share at Monday's exchange rates, amounts to a 40 percent premium over Pure's pre-announcement stock price.
Andrew Bradford, an analyst with Raymond James, recommended that Pure Energy shareholders vote in favor, noting in a report on the deal that a competing bid is possible but that a significantly higher one is unlikely.
FMC Technologies' shares closed down 95 cents at $47.02 in trading Monday on the New York Stock Exchange.
Pure Energy employs about 1,300 in Canada and the United States. FMC has 16,100 employees around the world, including 3,000 in Houston, King said.

Jeannie Kever joined the Houston Chronicle's energy team in September 2012.
A native of West Texas, she has been at the Houston Chronicle since 1997, working in the features department for 10 years before moving to the city desk, where she reported on higher education, the 2010 Census and health care before moving to the business desk.
She previously worked at the Sarasota (Florida) Herald-Tribune, the San Antonio Light, the Longview (Washington) Daily News, the El Paso Times and the San Angelo Standard Times.


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