Japanese firm to buy pipemaker
Japan-based Sumitomo Corp. and Sumitomo Corp. of America Inc. will acquire Baton Rouge-based specialty pipemaker Edgen Group Inc. in a deal valued at $520 million.
Sumitomo said it will acquire all of Edgen’s stock at $12 per share. The deal is expected to close by the end of the year.
With the assumption of Egen’s debt included, the deal is worth $1.2 billion.
The deal allows Sumitomo to expand its distribution through every part of the oil and gas market, from exploration and production to refining and pipelines, said Kazuhiro Takeuchi, president and chief executive officer of Sumitomo Corp. of America. Edgen’s acquisition complements Sumitomo’s existing product line, while adding a global distribution platform, experienced staff, facilities and an expanded offering of specialized steel products.
Edgen President and Chief Executive Officer Dan O’Leary will continue to lead Edgen’s strategic growth initiatives.
Edgen has 660 employees in more than 35 locations in 18 countries.
Edgen Group has two commercial brands: Edgen Murray and Bourland & Leverich. Edgen Murray is a global distributor of specialized steel products in offshore drilling and production; the gathering, processing, transportation and storage of oil and natural gas; and refining and petrochemical business.
Bourland & Leverich is a U.S. domestic oil country tubular goods distributor, which has been in business since 1935.
Edgen went public in 2012. The company had sales of $2.06 billion in 2012 but has struggled to find a niche with investors. The company hoped its initial public offering would generate at least $241 million, with shares in the range of $14 to $16. But the public offering was priced at $11 per share, fetching around $190 million.
Edgen’s shares have fallen as low as $5.67 per share in the last year. The stock closed Tuesday at $11.90, up $4.30 or 56.6 percent.
Sumitomo Corp. is a trading company with 116 locations in 65 countries, including 24 locations in Japan. The Sumitomo Corp. Group consists of nearly 800 companies and more than 70,000 workers. The group’s core business units are metal products; transportation and construction systems; environment and infrastructure; media, network, lifestyle-related goods and services; and mineral resources, energy, chemicals and electronics.