North American Energy Partners Acquires Cyntech Corporation
November 01 2010 - 4:30PM
Marketwired
North American Energy Partners Inc. ("NAEP" or "the Company") (TSX:
NOA) (NYSE: NOA) today announced that it has purchased the assets
of Cyntech Corporation and its wholly-owned subsidiary, Cyntech
Anchor Systems LLC (collectively "Cyntech"). Based in Calgary
Alberta, Cyntech is a designer and manufacturer of screw piles and
pipeline anchoring systems as well as a provider of tank
maintenance services to the petro-chemical industry. For its most
recently completed fiscal year ended October 31, 2009, Cyntech
reported consolidated revenues of approximately $24.7 million.
"Cyntech represents a uniquely synergistic acquisition
opportunity," said Rod Ruston, President and CEO of NAEP. "With one
transaction, we are adding new capabilities that complement our
existing service offering, increase our recurring services revenue
stream and expand our reach into international markets."
The transaction expands NAEP's screw piling capabilities,
positioning NAEP's Piling division to compete more effectively on
SAGD (Steam Assisted Gravity Drainage) oil sands and power
transmission construction projects. Screw piling is fast becoming
the preferred technology on these projects because of the low-cost,
high-efficiency installation of these types of piles. Cyntech
custom designs and manufactures screw piles at its facilities in
Calgary and Houston, Texas. The addition of Cyntech's design and
manufacturing capabilities will enable NAEP to provide a more
specialized, high-margin service to its piling customers.
While the new business will operate as part of the Piling
division, the acquisition also complements NAEP's existing pipeline
construction services with the addition of expertise in pipeline
anchoring systems. Cyntech's proprietary anchoring system provides
a cost-effective alternative to the concrete weights traditionally
used to anchor pipelines in unstable ground conditions. Cyntech has
established an international market for its systems with customers
in Canada, the US, Malaysia, Thailand, Indonesia and Russia.
Importantly, the transaction provides NAEP with a new source of
recurring services revenue with the addition of tank servicing
capabilities. Representing approximately 50% of its revenues,
Cyntech provides inspection, cleaning, repair and relocation
services for large-diameter petro-chemical storage tanks. The
scheduled inspection and integrity testing of these tanks is
regulated by provincial governments. In Alberta, the Energy
Resources Conservation Board (ERCB) requires inspection of large
above-ground storage tanks every five years.
"In light of the regulatory requirements dictating the frequency
of above-ground storage tank inspections and that these services
are provided under a multi-year agreement, we view the tank
business as a stable source of recurring services revenues," said
Mr. Ruston. "Furthermore, it's a logical extension of our tank pad
construction capabilities and enables us to support our clients'
efforts to reduce their environmental footprint."
"Overall this transaction is consistent with our stated
intention to grow our less-capital intensive businesses and expand
our high-margin service offering. We are adding a stable, low-risk
business with solid growth potential," added Mr. Ruston. "We look
forward to welcoming Cyntech's talented employees and managers to
the NAEP team."
About Cyntech Corporation
Cyntech Corporation (Cyntech) has been providing construction
and maintenance services to the oil and gas sector for over 20
years. Cyntech is a supplier of tank services, screw piles and
pipeline anchors to some of the world's large oil and gas companies
and pipeline operators. Cyntech's patented technology has
positioned the company as a leader in pipeline anchor systems
worldwide with a diversified customer base extending across Canada,
the US, Malaysia, Thailand, Indonesia and Russia.
Pursuant to this divestiture, Paladin Group CMS represented
Cyntech Corporation by acting as lead commercial negotiator,
transactional facilitator and financial advisor. Paladin Group CMS
is a leading Calgary-based, boutique advisory offering a range of
investment banking services to middle-market businesses in western
Canada.
About North American Energy Partners
North American Energy Partners Inc. (www.naepi.ca) is one of the
largest providers of heavy construction, mining, piling and
pipeline services in Western Canada. For more than 50 years, NAEP
has provided services to large oil, natural gas and resource
companies, with a principal focus on the Canadian oil sands. NAEP
maintains one of the largest independently owned equipment fleets
in the region.
This release contains forward-looking statements.
Forward-looking statements include statements preceded by, followed
by or that include the words "may", "could", "would", "should",
"believe", "expect", "anticipate", "plan", "estimate", "target",
"project", "intend", "continue", "further" or similar expressions.
Actual results could differ materially from those contemplated by
such forward-looking statements as a result of any number of
factors and uncertainties, many of which are beyond our control.
Important factors that could cause actual results to differ
materially from those in forward-looking statements include success
of business development efforts, changes in oil and gas prices,
availability of a skilled labour force, internal controls, general
economic conditions, terms of our debt instruments, exchange rate
fluctuations, weather conditions, performance of our customers,
access to equipment, changes in laws, and ability to execute
transactions. Undue reliance should not be placed upon
forward-looking statements and we undertake no obligation, other
than as required by applicable law, to update or revise those
statements.
For more complete information about us you should read our
disclosure documents that we have filed with the SEC and the CSA.
You may obtain these documents for free by visiting EDGAR on the
SEC website at www.sec.gov or SEDAR on the CSA website at
www.sedar.com.
Contacts: North American Energy Partners Inc. Kevin Rowand
Investor Relations (780) 969-5528 (780) 969-5599 (FAX)
krowand@nacg.ca www.naepi.ca
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