Offshore engineering firm FES International is to become part of multi-national oil and gas industry supplier Hunting after being acquired in a £50m cash deal.
The more than 20-year-old Ashington business, founded by directors Rob Anderson and Ian Latimer, will become part of the London-based $1.5bn revenue group which operates from 11 countries. Hunting said the acquisition would boost its deepwater and ultra deepwater capabilities, bringing FES' subsea fluid transfer technologies to its customer base.
Announcing the deal to shareholders, Hunting pointed to FES' potential to grow internationally, particularly in locations such as South East Asia, the US, West Africa and Brazil. The acquisition is expected to grow Hunting's earnings in its first full financial year of ownership, before acquisition costs and normal acquisition adjustments such as fair value adjustments and the amortisation of intangible assets.
FES started as a two-man team with a first year turnover of £143,000, before growing to establish relationships with super majors, independent oil and gas companies and international energy operators. It currently trades from a 35,000 sqft facility and 6,000 sqft test facility, altogether employing 46 people, and runs three key divisions covering fluid handling, subsea and marine.
The firm's North East-built kit has been deployed around the world including in West Africa, the Gulf of Mexico and South America. The majority of its revenues come international business and Hunting has pointed to an order book of about £11.8m, with a tender pipeline said to be worth more than £100m.
Last year, unaudited revenue for FES was £31.3m and Ebitda was £6.2m. Turnover in 2023 had been £55.9m with operating profit of £10.8m. At the end of December, the firm's balance sheet recorded net assets of £33.1m and gross assets of £36.2m.
Mr Anderson and Mr Latimer will stay with FES for at least 12 months as the business joins Hunting's Subsea Technologies segment, reporting into its managing director Dane Tipton.
Meanwhile, Hunting reported a swing to a pre-tax loss of $33.5m (£24.6m) last year from revenue of $1.5bn (£1.1bn). Earlier this year it said 2025 should bring steady growth in revenue and adjusted earnings as bosses anticipate a boost to energy supply activity driven by geopolitical issues.
Jim Johnson, chief executive of Hunting, said: "We are pleased to complete the acquisition of FES. It immediately boosts our subsea portfolio with proprietary products and capabilities and clearly demonstrates progress on our Hunting 2030 Strategy.
"FES's fluid transfer solutions perfectly complement our existing subsea and FPSO-related lines, creating strong product bundling and cross-selling opportunities with our existing subsea businesses as well as the potential for further international growth. FES's blue-chip customer base, international profile and high margin, mission critical applications make the business an ideal fit for Hunting."
