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RPT-CORRECTED-INTERVIEW-Amec hunting for more acquisitions on top of Kentz
September 4, 2013 / 7:27 AM / in 4 years

RPT-CORRECTED-INTERVIEW-Amec hunting for more acquisitions on top of Kentz

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By Stephen Eisenhammer

ABERDEEN, Sept 3 (Reuters) - British engineer Amec is looking at other acquisition options alongside its offer for the oil and gas construction firm Kentz, as it aims to expand in Australia, Africa and the Middle East, its chief executive said.

Amec had an approach for Kentz at 565 to 580 pence per share rejected by the board last month and must make a formal bid by Sept. 16.

But Samir Brikho, chief executive of Amec, which provides services and equipment for the oil and gas, mining, nuclear and renewable energy sectors, has more targets in his sights.

“We have a pipeline of acquisition targets and you need to have at least two things to make a line - otherwise it’s just a point,” he told Reuters in an interview at the Offshore Europe conference in Aberdeen.

Amec has said that it will consider returning cash to shareholders in the fourth quarter if no acquisitions are made.

Brikho would not be drawn on whether he would raise his offer for Kentz, but asserted he thought Amec had valued the firm fairly.

The offer valued Kentz at around 680 million pounds, compared to a market capitalisation of 561 million pounds before news of the offer.

Kentz, a FTSE 250 company, has grown rapidly since listing in 2008. Recent contract awards include building parts of the Nacala rail and port project in Mozambique and the Ichthys LNG project in Darwin, Australia.

“The company has the geographic footprint we’re after and it shares clients with us like Exxon Mobil and BP,” Brikho said.

Brikho was frustrated that Amec’s bid had been leaked, a point which analysts at the time said would make it less likely the firm would be dragged into a bidding war.

“There are now excessive meetings which could have been avoided,” he said.


Brikho said he was confident Amec, as part of the Nuclear Management Partners consortium with U.S. firm URS and France’s Areva, would have the contract for decommissioning the Sellafield nuclear site in the UK extended.

The first five years of the contract with the UK government is finishing and a decision on its extension is due this month.

The first five years focused on scouting the site and defining what work had to be done, meaning it would make little sense to pass the work on to someone else, according to Brikho.

“It’s a long journey, not just a project... It would not be wise to get somebody else to do it now,” he said.

Brikho said Amec would be making less money from the project in the second period of the contract, with estimated contribution down to 6 million pounds for next year. But he said the importance of Sellafield lay in the ability to sell the acquired skills elsewhere in the world. (Reporting by Stephen Eisenhammer; Editing by David Evans)

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