Kentz (LON:KENZ) , the AIM quoted engineering and construction group, has acquired engineering services company RNE Engineering and Projects (Pty) Ltd from its founders and other shareholders for Rand 73m (approximately £6.2m) over four years. RNE undertakes project management, engineering and design services including process, mechanical, piping, civil and structural engineering for oil, gas and petrochemical process plants. It is involved in both capital expenditure projects and asset enhancement production services and has approximately 85 employees based in two offices in Secunda and Sasolburg, South Africa. The Kentz share price responded with a 2.8% rise to 406p.
RNE has a successful track record as a leading supplier to Sasol and has worked with Kentz in South Africa for over three years. The partnership will support the growth of activity in South Africa as well as the opportunity to jointly tender for select engineering, procurement and construction (EPC) contracts. Kentz said the acquisition was aligned with its strategy of growth through smaller, value enhancing opportunities to supplement its existing capabilities across the global footprint of the group. The acquisition will be earnings enhancing in the first full year of ownership.
Hugh O’Donnell, the chief executive of Kentz, said: “RNE has built an impressive market presence in the oil, gas, petrochemicals, metals and mining market sectors in South Africa. By bringing the experience of RNE together with Kentz’s presence in a broader number of sectors we are now well positioned to offer an expanded range of niche EPC solutions to a wider client base throughout Southern Africa. Our business is about people and we have a found a strong cultural fit with the RNE senior management team. We share the same values in delivering world class projects safely for our clients.”
In recent news, Kentz last month said it had been awarded an EPC contract worth in excess of US$30m by Abu Dhabi Gas Industries Ltd (GASCO). That followed news that the company was expecting that revenues and profits in the year to December 2010 would be well ahead of current market expectations