Shumate Industries Inc. (www.shumateinc.com), a Texas-based energy field services company, will buy Sunbelt Machine Works Corp. (www.sunbeltmachine.com), a privately-owned precision machine shop for $14.5 million. Completion of the acquisition is subject to several conditions including due diligence, board approval and financing.
Sunbelt has more than 80 CNC and related machines used to manufacture down-hole production products, logging and measuring tools and valves for Fortune 500 energy customers. It is expected to generate $16 million in revenues with $3.5 million in earnings before interest, taxes, depreciation and amortization (EBITDA) for fiscal year 2007.
Larry Shumate, chairman and chief executive officer of Shumate Industries, stated, "Sunbelt is a very solid company with an excellent reputation in the marketplace which they have earned over the last 29 years. Having a strategic manufacturing resource with excess manufacturing capacity to make our Hemiwedge down-hole isolation valve (DIV) is key in today's tight supply-chain operating environment.” Shumate added, "In addition to being immediately accretive, this acquisition is strategic to our company bringing additional customers, and saves time and money allowing us to avoid slowly developing an outside supply chain for a new product like the DIV."
Frank Scantlin, chairman of Sunbelt Machine Works, stated, "Sunbelt has a bright future in its own right as one of the largest independent machining and manufacturing companies in the Southwest U.S., however, the addition of a proprietary down-hole valve like the Hemiwedge DIV gives our company another product that gives us higher control and increasing visibility for our future growth."
Sunbelt operates in two adjacent buildings totaling approximately 55,000 square feet of space. The acquisition is expected to close within the next 45 days.