Actuant Shuffles Energy Wing With Viking Sale, Mirage Buyout
Zacks Investment Research | Dec 03, 2017 08:33PM ET
Machinery company Actuant Corporation (NYSE:ATU) announced that it has successfully divested its Viking SeaTech business to Acteon Group Limited and acquired Mirage Machines, Ltd. from the same. Both these transactions were originally announced on Aug 16.
Viking SeaTech business was part of Actuant’s Energy segment and primarily delivered mooring solutions in the offshore oil & gas exploration, drilling and well development end markets. On the other hand, Mirage Machines manufactures industrial and energy maintenance tools.
Details of the Twin Transactions
As noted, the Viking SeaTech business generated roughly $20 million revenues in the trailing 12 months. Actuant received proceeds of approximately $12 million from Acteon for this divestment.
For Mirage Machines acquisition, the company paid roughly $16 million to Acteon and promised additional consideration based on future performance.
In fiscal 2017 (ended August 2017), Actuant recorded impairment and divestiture related charges of $117 million while predicts to incur $15-$20 million of these charges in second-quarter fiscal 2018.
Benefits From the Transactions
In fourth-quarter fiscal 2017, Actuant’s Energy segment’s sales totaled $68.6 million, decreasing 24.9% year over year. Core sales dipped 25% year over year. Poor upstream offshore oil & gas demand and lower sales accrued from the company’s Hydratight business, dented the segment’s sales in the quarter.
Actuant believes that both these transactions were in sync with its intention of streamlining its Energy business to provide superior benefits to shareholders. The Viking divestment will limit the company’s exposure to upstream, offshore oil & gas markets while the addition of Mirage Machines will broaden product offerings in the flange facing and hot tapping categories. Specifically, the buyout will complement the Energy segment’s Hydratight business and create rental and service business opportunities.
In a month, the company’s shares have yielded 4.1% return, outperforming 2.6% gain of the Zacks Investment Research
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