VIKING O&M

VIKING O&M announced yesterday the purchase of controlling stakes in 2 companies for a total of $29.8m:
1) it is buying 100% of Promoter Hydraulics, a specialist in winches, power packs and marine decking equipment, for $22.3m in cash and shares (1st tranche of $10m cash upon completion and a 2nd tranche of $8m cash plus $4.3m in new Viking shares by Jan 2011).
2) Second acquisition is a 55% stake in Marine Accomm.

The private co is said to be S'pore's largest turnkey project integrator of accommodation and fit-out units for the offshore and marine industry. The cost of this deal is $7.5m. Viking has also entered a put-and-call option agreement which, if exercised, will result in the acquisition of the remaining 45% of the shares in Marine Accomm within specific periods during the next 2 yrs. Viking's two acquisitions will be funded from internal and/or external sources.

According to mgtm, the aim of the acquisitions is to bolster its offerings and to provide opportunities for growth through cross-selling. The acquisitions will also expand Viking's value chain and client base, putting the group in a stronger position to compete through savings from economies of scale, greater operational efficiency and better utilisation of resources. The stock is currently trading at 11x forward PER.