Sumitomo to Acquire 100% Shares of Edgen Group
OREANDA-NEWS. Sumitomo Corporation and Sumitomo Corporation of America (collectively "Sumitomo Corporation group"), have agreed with U.S energy-related steel products distributor, Edgen Group, and its 56 percent shareholder, private equity fund Jefferies Capital Partners to aquire Edgen Group for USD 12 per share. Upon finalization, Sumitomo will purchase 100 percent of the shares of Edgen Group for a total value of approximately USD 520 million.
The Edgen Group's subsidiaries include Edgen Murray, a global distributor for oil & gas drilling, transportation, refinery, and power plant equipment such as pipe, connectors, flanges, and valves; and Bourland & Leverich (B&L), a U.S. domestic OCTG distributor. Edgen Murray emerged from Thomas Pipe, an OCTG distributor since 1983, and has since expanded, through acquisitions and growth, to 35 business locations in 18 countries across North America, Asia, the Middle East, and Europe, and currently supplies products to the upstream, midstream, and downstream markets of the global oil & gas industry. B&L, established in 1935 in Pampa, Texas, has created a nationwide distribution network with a strong presence in the oil & gas market, and more recently has been expanding its business, supported by growth in the shale industry.
The Sumitomo Corporation group has been a longtime supplier in the OCTG industry and has grown from its core business of exporting OCTG to major international oil companies, to providing SCM (supply chain management) services for on-demand pipe supply at drilling operation sites. It also has an extensive OCTG distribution network in the U.S., and more recently has been increasing its investments in pipe mills and fabrication of specialized products to broaden its presence in each step of the value-chain surrounding the oil and gas market.
The Edgen Group acquisition is expected to further strengthen and expand this network to cover demand for both onshore development, where demand for products including OCTG and linepipe for oil & gas production and transportation; and pipes, fittings, and flanges for refinery, petrochemical, and power-plant use is expected to increase from shale activity; and offshore oil & gas development where strong demand for pipe, steel plate, and specialized materials is expected to continue. Sumitomo Corporation group aims to broaden its scope of services further into the value chain of the industry in order to enhance its capabilities to respond to ever heightening customer needs.
Egden Group is a Baton-Rouge, Louisiana based leading global distributor of specialized products to the energy and infrastructure markets.
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