Hunting PLC ('Hunting' or 'the Company' or 'the Group') Acquisition of Flexible Engineered Solutions (Group) Holdings Limited ('FES') and Capital Allocation Policy Update

Business Wire

24-06-2025

LONDON--(BUSINESS WIRE)--Hunting PLC (LSE:HTG), the precision engineering group, today announces that it has completed the acquisition of the entire issued share capital of Flexible Engineered Solutions (Group) Holdings Limited ('FES'), a company based in the United Kingdom, for a total cash consideration of £50m, on a cash free / debt free basis, and which is subject to customary post-completion adjustments.
Acquisition highlights and strategic rationale
The transaction represents an important step towards the delivery of the Hunting 2030 Strategy, strengthening Hunting's growing offshore / subsea revenue profile and increasing the Group's product coverage of deepwater and ultra deepwater markets:
The transaction provides access to proprietary subsea fluid transfer technologies and system solutions for the offshore oil and gas and renewable energy industries, which are well-aligned to Hunting's current customer base.
FES's portfolio of fluid transfer solutions are used in Floating Production Storage and Offloading vessels ('FPSOs') and Subsea Distribution Systems ('SDSs') and provides significant product bundling and cross-selling opportunities for Hunting's other subsea businesses across key offshore regions.
FES's mission critical and highly engineered proprietary technology has driven robust growth and delivered a strong margin profile, which will be accretive to Hunting's EBITDA margins.
There is significant potential to grow FES's existing international presence via Hunting's global footprint in key customer locations such as Brazil, South East Asia, USA and West Africa.
The addition of FES to the Group is expected to be earnings accretive in the first full financial year of ownership (before acquisition costs and normal acquisition adjustments such as fair value adjustments and the amortisation of intangible assets), as well as being highly cash generative.
The acquisition is in line with Hunting's broader growth strategy, outlined at the Group's Capital Markets Day in September 2023, which detailed its expansion into the subsea equipment sub-sector of the energy industry.
The acquisition has completed, with the consideration being funded from Hunting's existing cash resources. FES is being acquired from members of its current management team, with the senior management team, comprising the principal sellers of FES, agreeing to remain with Hunting for at least twelve months post-acquisition.
FES will be integrated within Hunting's Subsea Technologies operating segment and will report into Dane Tipton, the managing director of this operating segment.
Commenting on the acquisition, 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.'
Capital Allocation Policy Update
Hunting remains a highly cash generative business with considerable financial flexibility and, following the completion of the FES acquisition, the Group retains total cash and bank / (borrowings) of c.$40m.
Following the successful acquisition of FES, the Group is reviewing its capital allocation policy and priorities and will confirm its intentions in the coming weeks.
Financial performance (unaudited)
For the year ended 31 December 2024, under UK GAAP, FES generated revenue of £31.3m and EBITDA of £6.2m. Adjusting EBITDA to include the impact of IFRS 16 'Leases' and other management adjustments, FES recorded EBITDA of £6.7m in 2024.
At 31 December 2024, under UK GAAP, FES's balance sheet recorded net assets of £33.1m and gross assets of £36.2m. All of FES's 2024 results are subject to audit.
At completion, FES recorded a sales order book of c.£11.8m, with a robust tender pipeline and bid opportunities extending in excess of £100m.
Overview of FES
Headquartered in Ashington, Northumberland, UK FES operates from a 35,000 sq. ft. facility, in addition to a 6,000 sq. ft. test facility. FES currently has 46 employees. FES has diverse customer, product and market exposure and is a leader in its three core divisions of oil and gas fluid handling, with a portfolio of products used in FPSO and deepwater subsea distribution applications.
FES's solutions have been deployed in many key offshore regions including the Gulf of Mexico, West Africa, and South America and the majority of its revenues coming from international business outside the UK.
FES also benefits from long-term relationships with a wide variety of blue-chip customers, including super majors, independent oil and gas companies, and international energy service companies, working on large, multi-year projects, that provide high levels of earnings visibility.
FES owns intellectual property in respect of a number of its product lines with a balanced portfolio of capabilities, which include:
Diverless Bend Stiffener Connectors ('DBSC');
Turret Systems;
Fluid Transfer Swivels;
Hydraulic, Electric and Fibre Stab Plates;
Subsea Control Panels;
Pig Launchers;
Spooling Systems;
Seawater Intake Systems; and
Suction Pile Vent Hatches.
FES's DBSC solution provides support and protection for the production umbilicals, flexible and power cables used within offshore oil and gas production infrastructure.
There are clear opportunities to grow FES in the floating offshore wind sector and the business has further implemented its DBSC technology to provide a turnkey cable connection system for the offshore renewable market.
For further information on FES's products please visit https://www.fesinternational.com/ or visit www.huntingplc.com/investors/fes-acquisition.
Webcast and Analyst Call
An overview of FES and its contribution to Hunting's strategic growth path, as laid out in its Hunting 2030 Strategy, will be provided at a webcast which will commence at 2:00p.m. (London) / 8:00a.m. (Houston) today.
Jim Johnson, Chief Executive; Bruce Ferguson, Finance Director; and Dane Tipton, managing director of the Subsea Technologies operating segment, will provide a short presentation followed by a question and answer session.
To access the webcast, please contact Sodali & Co via [e-mail].
Next Trading Update
Hunting PLC will be announcing its H1 2025 Trading Update on Wednesday 9 July 2025.
About Hunting PLC
Hunting is a global, precision engineering group that provides precision-manufactured equipment and premium services, which add value for our customers. Established in 1874, it is a listed public company, quoted on the London Stock Exchange in the Equity Shares in Commercial Companies ('ESCC') category. The Company maintains a corporate office in Houston and is headquartered in London. As well as the United Kingdom, the Company has operations in China, India, Indonesia, Mexico, Netherlands, Norway, Saudi Arabia, Singapore, United Arab Emirates and the United States of America.
The Group reports in US dollars across five operating segments: Hunting Titan; North America; Subsea Technologies; Europe, Middle East and Africa ('EMEA'); and Asia Pacific.
The Group also reports revenue and EBITDA financial metrics based on five product groups: OCTG, Perforating Systems, Subsea, Advanced Manufacturing and Other Manufacturing.
Hunting PLC's Legal Entity Identifier is 2138008S5FL78ITZRN66.
Inside information
The information contained within this announcement is considered by Hunting to constitute inside information as stipulated under the Market Abuse Regulation (EU) No.596/2014 (as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018). On the publication of this announcement via a Regulatory Information Service, such information is now considered to be in the public domain.
The person responsible for arranging the release of this announcement on behalf of the Company is Ben Willey, Company Secretary of Hunting.