SERVICE SECTOR / CE Franklin Ltd. To Acquire Kudu Industries
CE FRANKLIN LTD.
TSE SYMBOL: CFT
AMEX SYMBOL: CFK
JULY 22, 1998
CE Franklin Ltd. Signs Letter of Intent to Acquire Kudu
Industries Inc.
CALGARY, ALBERTA--CE FRANKLIN LTD. (TSE.CFT, AMEX.CFK) announced
today that it has signed a letter of intent to acquire, for cash,
all the outstanding shares of Kudu Industries Inc. (Kudu). Kudu,
a Calgary based oilfield pump manufacturer, is 55 percent owned by
a numbered company controlled by two management shareholders with
the other 45 percent owned by PCM Pompes, S.A. (PCM Pompes) of
France. The Closing of the transaction is subject to definitive
documentation, due diligence reviews and receipt of any required
approvals and is anticipated to occur in mid September, 1998.
Under the terms of the letter of intent Kudu will continue to
manufacture their own line of driveheads for progressing cavity
pumps and partially manufacture the downhole pumps from components
made by PCM Pompes. PCM Pompes, through a distribution agreement
with CE Franklin will provide the components of the progressing
cavity pumps. This is a strategic acquisition for CE Franklin
which will allow the company to build brand loyalty in a core
product. Kudu's sales for the first five months of 1998 were over
Cdn$10 million.
Upon announcing the proposed acquisition, Robert Mills, President
of Kudu commented, "We will be pleased to become part of CE
Franklin. CE Franklin offers Kudu the financial and marketing
resources to pursue opportunities in markets which Kudu has
identified as expansion areas; for example, expansion into other
US markets and the development of new products which Kudu has
designed."
"Kudu gives our company an important building block to strengthen
our artificial lift business through a sustained growth program in
progressing cavity pumps," added John Gilbank, CE Franklin's
Chairman and Chief Executive Officer. "In addition to the
marketing synergies, we will be able to improve our efficiency."
Lou Sprecher, President of PCM Moineau Oilfield Inc., a division
of PCM Pompes, said, "The new distribution agreement will provide
both PCM Pompes and CE Franklin with additional growth
opportunities in North America because of CE Franklin's strong
leadership and management team."
Kudu is the second largest supplier of oilwell progressing cavity
pumps in North America. The company provides full service to its
customers from its six Canadian locations and four American
locations. They manufacture their own line of driveheads and
partially manufacture the pumps from components made by PCM
Pompes. Kudu also manufactures accessories for oilwell
progressing cavity pumps such as sucker rod centralizers. Kudu is
a leader in the development of the technology with eight patents
issued and three patents pending.
CE Franklin is Canada's largest distributor of supplies to the oil
and gas drilling and production industry. In addition to its
complete range of production equipment, including major artificial
lift technology, the company sells pipe, valves, fittings and
maintenance supplies and provides complete customer inventory
procurement and management services through its 46 locations
across Canada. The company also manufactures and packages
specialized products for the energy industry and provides supply
packages for projects in the hydrocarbon processing industry
through its Piping Resources Division. |
