Layne Christensen Co. announced that it has acquired the remaining 50% interest of Costa Fortuna Fundacoes e Construcoes Ltda that it did not previously own. Layne acquired its initial 50% interest in Costa Fortuna in July 2010.
Costa Fortuna, with operations in Sao Paulo, Brazil and Montevideo, Uruguay, is part of Layne's Geoconstruction Group and is one of the largest providers of specialty foundation and specialized marine geotechnical services in South America. Costa Fortuna specializes in the implementation of large-diameter bored piles, diaphragm walls, root piles, soil nailing, jet grouting, investigatory geotechnical services and maritime and river-specialized foundations.
For calendar year 2011, Costa Fortuna had revenues of $49.5 million, net income of $7.8 million and EBITDA of $13.9 million. Layne will recognize 100% of Costa Fortuna's revenues and profits beginning in the second quarter ending July 31, 2012. Costa Fortuna's backlog at April 30, 2012 was $55 million.
Total consideration paid by Layne for the remaining 50% interest was $16.15 million, bringing Layne's total investment in Costa Fortuna to $32.3 million for a 100% interest, plus the assumption of $9 million in debt. The value of the acquisition is approximately three times EBITDA. Escrow of $2.4 million will be held for two years.
Layne CEO, Rene Robichaud, stated, "Costa Fortuna has been a strong performer, and we believe that there is a significant opportunity to expand Layne's geotechnical construction capabilities in South America over the next several years. The Brazilian construction market is estimated at well over $100 billion for the next five years, with a substantial portion expected in market opportunities generated by the World Cup in 2014 and the Olympic Games in 2016. As a market leader in South America, Costa Fortuna enjoys established construction industry partnerships, a track record of successfully completing specialized, complex projects, and a reputation for integrity and dependability. They will fit nicely as we apply the principles of OneLayne to pursue solutions-based project opportunities across all divisions and geographies."
Source: Layne Christensen Co.
