Howden acquires TCS BV
Howden today announced that it has agreed to acquire the entire issued share capital of Thomassen Compression Systems BV ("Thomassen"). The acquisition complements Howden’s existing range of compressors and opens up a much wider market for the company in the oil & gas and petrochemical industries.
Howden and Thomassen have very similar core competencies in the application engineering of custom designed, high technology products for performance critical environments.
The compressor range, which includes screw, centrifugal turbo, diaphragm and horizontal piston compressors, is an increasingly important part of Howden’s global portfolio. Accounting for over 17% of its £562 million turnover in 2010, Howden’s compressors are used for a variety of applications, especially in the oil & gas and petrochemical industries.
Thomassen, based in the Netherlands, focuses on the design, assembly, installation and servicing of custom-made horizontal piston compressors. Like the Howden range, these compressors are highly-engineered, large scale products, but with pressures up to 600 bar and power capability up to 25MW. They are designed for high power applications, primarily in the oil refining and petrochemical industries.
The primary application for high specification horizontal piston compressors is the compression of hydrogen. Both Howden and Thomassen are leaders in this market with Howden’s range and experience being primarily for lower powers of up to 1MW (megawatt) and Thomassen’s range and experience being for higher power ranges.
Thomassen has approximately 280 employees mainly based in the Netherlands with the remainder located in service centres and sales offices around the world. The company will continue to operate from its premises at Rheden as a stand-alone business within Howden.
The combination of Howden and Thomassen creates a global company capable of supplying a wider range of compressors, and this is expected to bring market opportunities not currently available to either company. Significant benefits will come from Howden’s ability to extend Thomassen’s presence in China and other markets where sales have been limited, and from Thomassen sharing access to Howden’s global sourcing capabilities.
Bob Cleland, Howden Chief Executive said “I am absolutely delighted with this acquisition which adds a major range of complementary products to our compressor portfolio. It increases our activities in the refining and petrochemical sector, which have been underweight compared to our core market of power generation. It is part of our strategy to widen our range of products used in performance critical applications in key global infrastructure industries. This acquisition reinforces Howden’s position as a global application engineering business competing successfully on a worldwide basis”.
Commenting on the acquisition Michael Foster, Chief Executive of Charter International plc, said: “This is a transformational deal for Howden. We have very carefully considered the right acquisition for Howden and we are delighted to have secured Thomassen which will make Howden a leading presence in the supply of engineered compressors, in particular to the oil & gas and petrochemical industries. In addition, the acquisition will increase its revenues generated in emerging/growth economies and from the aftermarket.
We believe that Howden and Thomassen together will be able to generate significant synergies, amounting to at least €5 million per annum by 2014, and continuing to increase thereafter. We expect the acquisition to enhance adjusted earnings per share in 2011, and to cover its cost of capital in 2012, the first full year of ownership.”