Pure Technologies acquires Hunter McDonnell

Pure Technologies Ltd. has entered into a definitive agreement to acquire the oil and gas pipeline inspection services business and related assets of Hunter McDonnell Pipeline Services, Inc. and its affiliated companies (HM), a leading provider of technology-driven integrity services to the oil and gas pipeline industry, for consideration of US$8 million, consisting of US$6 million in cash and US$2 million in common shares of Pure, issuable in equal tranches on each of the first, second and third anniversaries of the closing date of the transaction. Closing of the transaction is expected to occur early in the third quarter of 2014. For the financial year ended 31 March, 2014, HM generated revenue more than US$10 million.

"This is a highly accretive acquisition for the Company and will serve as a catalyst for expansion into the oil and gas pipeline sector," said Jack Elliott, President and Chief Executive Officer of Pure. "While we have been growing our presence in this sector over the past few years through the deployment of our SmartBall® leak detection technology, the acquisition of the HM business will accelerate this growth. Similar to our own strategy for the water sector, HM has been at the leading edge of developing and enhancing a suite of premium technologies and asset management services, from pipeline surveys and remote tracking of inline inspection tools to risk assessment and engineering. When combined with Pure's existing services, the Company will be now able to provide hydrocarbon pipeline operators with unparalleled information for use within their integrity programmes."

Since 2011, HM has provided tracking services on Pure's SmartBall technology inspections for the Company's North American oil pipeline clients. In August of 2013, Pure and HM entered into a partnership agreement whereby Pure trained HM staff to deploy the SmartBall technology in oil pipelines within North America.

"HM has built an excellent reputation for itself within the industry over the years," said Mark Holley, Pure's Executive Vice President and Chief Operating Officer. "Considerable R&D spending has led to the development of HM's enhanced, proprietary products and services, patents and trade secrets. This has resulted in recent significant growth which is expected to continue as regulatory and stakeholder pressures drive increased emphasis on pipeline inspection and integrity programs."

HM's business will, following closing of the transaction and the transition of operations, be transacted through PureHM Inc. in Canada and PureHM US Inc. in the US (PureHM), newly-incorporated subsidiaries of the Company. Pure will transfer all of its activities related to the oil and gas pipeline industry to PureHM. Shamus McDonnell, co-founder and Chief Executive Officer of HM, will assume the position of President, PureHM, and Jim Hunter, co-founder and Vice President of Operations for HM, will assume the same position with PureHM.

"We are excited to expand on the relationship we've enjoyed with Pure over the past three years," said Shamus McDonnell, co-founder of HM. "By joining a proven entity with a widespread geographical presence in North America and elsewhere, a strong research and development team and a healthy balance sheet, together we will be able to capitalise on the growing demand we are seeing for our services in the oil and gas pipeline market. In addition, the SmartBall technology, with its enhanced pipe wall assessment capabilities, is ideal for complementing existing pipeline integrity programs, or as an integrity check on non-piggable pipelines which constitute the majority of hydrocarbon pipelines within North America. We see this unique technology as a natural fit with HM's innovative technologies and services, and we expect to see an acceleration of its use moving ahead."


Adapted from press release by Hannah Priestley-Eaton

Published on 20/04/2015


Get your FREE Oilfield Technology magazine »

Get your FREE trial of Hydrocarbon Engineering magazine »

Get your FREE trial of World Pipelines magazine »


 
 

Related articles

Oil & Gas Awards 2015 open for entries

The 3rd Annual Oil & Gas Awards, taking place in 2015, are now open for entries.

Pipeline Contractors’ Directory (part 2)

The second part of Energy Global’s Pipeline Contractors’ Directorty reporting on oil and gas pipeline engineering contractors

Pipeline Contractors’ Directory (part 1)

Energy Global's Pipeline Contractors’ Directory is an annual report of oil and gas pipeline engineering contractors worldwide

Pipeline opportunities in Europe

There are a great number of opportunities for supply chain companies in the pipeline sector in Europe today and looking to the future.

Recommend magazines

  World Pipelines