Dresser-Rand Group Inc. will acquire Grupo Guascor S.L., a privately held manufacturer of diesel and gas engines, for $690 million in a cash and stock. The purchase agreement calls for Dresser-Rand to assume approximately $172 million in net debt. The transaction is planned to close in the second quarter of this year, but it remains subject to various closing conditions, including various regulatory approvals, licenses, and clearances.
Houston-based Dresser-Rand Group manufactures rotating equipment for oil, gas, and petrochemical companies, and other manufacturers in the process industries.
GG, headquartered in Vitoria-Gasteiz, Spain, supplies diesel and gas “customized energy solutions” based upon reciprocating engine power systems technologies, for energy infrastructure markets worldwide. Also, it offers products with bio-energy and distributed generation applications.
"Our belief in the future of energy needs for regions and nations require an integrated approach, like the one we are building, to create value from a solution of cooperation between businesses, governments and communities,” according to Joseba Grajales, Guascor's chairman and principal owner.
Dresser-Rand president and CEO Vince Volpe explained that GG’s “gas and diesel engine technology is a good fit for both power generation and compressor drive applications in our traditional oil and gas markets," said Volpe. "Using the existing Dresser-Rand new units and aftermarket service channels, Guascor will use its technology to gain access to markets and geographies it previously did not serve. Similarly, by utilizing Guascor's existing market channels and overall project development expertise, the Dresser-Rand products presently being offered into the environmental space should increase significantly, particularly in power generation new unit and aftermarket sales opportunities."
Concurrent with the transaction, the Dresser-Rand’s board authorized a new stock repurchase program to recover approximately 5.0 million common shares of Dresser-Rand. The company intends to repurchase approximately $130 million of its common shares to complete its previously authorized $200-million share repurchase program.