Shares in Cape surged 8% yesterday after the industrial service group said it had acquired Scottish engineer Motherwell Bridge in a deal worth £37.7million.
Cape, which has offices in Aberdeen and employs more than 1,000 people in the North Sea, said the move was part of a strategy of broadening its range of “critical” services.
Motherwell Bridge designs, supplies and maintains storage tanks, gas holders and heat exchangers for customers in energy and steel markets globally.
It employs around 300 people, including 100 at its main Motherwell site, with the rest spread between UK facilities in Wakefield and Telford, and bases serving key markets abroad.
Over the past 100 years the firm has handled projects in more than 80 countries on six continents.
The acquisition price includes an initial cash sum of £34million and £900,000 to cover debt.
The rest comprises a deferred £1.25million, which hinges on Motherwell Bridge securing a key contract, and up to £1.5million related to performance.
Most of the total goes to an Islamic bank, with Kuwait Finance House-Bahrain having acquired 80% of the business through a leveraged buyout in 2008. The remaining 20% was held by Motherwell Bridge’s UK lender and senior management.
The firm said top bosses, led by chief executive Russell Ward, were staying on. Mr Ward told the Press and Journal the takeover would create “great opportunities” for the business and its workforce.
He added: “This is an excellent deal for Motherwell Bridge.
“While the business has achieved good growth over the past few years, Cape’s significant resources and footprint will help accelerate and realise our growth plans in the UK and overseas.
“There is no doubt that having the backing of a leading industry player in the form of Cape will signal a major transformation of the company.”
Latest figures show Motherwell Bridge generating £4.8million in earnings before interest, tax and amortisation on revenue of £34.6million during 2012.
Cape, which has its international headquarters in Singapore and UK corporate head offices in Middlesex, said the acquisition would be funded from existing debt facilities.
The deal is expected to be earnings enhancing for the new owner, which reported total revenue of £749million for 2012, this year.
Cape chief executive Joe Oatley said: “The acquisition of Motherwell Bridge is in line with Cape’s strategy to broaden our portfolio of essential critical industrial services.
“We expect to accelerate Motherwell Bridge’s overseas growth.
Shares ended the day up 24p to 324p.