Cal Dive International, Inc. announced that it has agreed to acquire 85 percent of Canyon Offshore, Inc., a supplier of remotely operated vehicles (ROVs) and robotics to the offshore construction and telecommunications industries. Cal Dive would purchase the remaining 15 percent at a price to be determined by Canyon's performance during the years 2002 through 2004. The purchase price from $66 million $74 million is four to five times expected Canyon EBITDA. The acquisition, which is subject to the customary
Hart Scott Rodino filing, is expected to close before year-end.
Owen Kratz, chairman and chief executive officer of Cal Dive, said, "Acquiring Canyon will be a vertical integration which flows from the CDI policy of directly controlling all aspects on the critical path of significant projects. As marine construction support in the Gulf of Mexico moves to deeper and deeper waters, ROV systems will play an increasingly important role."
John S. Edwards, chief executive officer of Canyon, stated, "CDI was our first customer when Canyon began operations in early 1997 and we have enjoyed the status of an Alliance Partner ever since. CDI seeks this strategic investment to secure key remote systems capabilities so critical to their future in deepwater construction and well intervention operations. Canyon's submarine cable burial business provides a platform for international operations and revenue diversification. We are extremely excited to be joining the CDI group of companies and expect to be a major contributor to
their continuing success."
Canyon Offshore currently
owns 18 ROV systems and operates six others in three regions: United States (11), Southeast Asia (9), and the North Sea (4). In 2001 Canyon introduced the next-generation work-class ROV, the Quest.
Advantages of the Quest include: electric instead of hydraulic systems, 50 percent smaller footprint, fewer moving parts (i.e. lower operating costs), a dynamic positioning system and improved depth rating. Canyon offers a full spread of services to the marine construction segment of the oil and gas industry,
including survey, engineering, repair and maintenance. The company entered
the cable burial industry in September 2000 and presently operates eight
trenching systems internationally, including four customer-owned units. The average age of the Canyon ROV fleet is approximately two years.
Kratz continued, "I foresee a major revolution in the robotics necessary to support activities in the ultra-deepwater from 5,000 to 10,000
ft. Canyon's small but focused engineering group will provide the technical expertise to exploit this market opportunity."
Martin Ferron, President and chief operating officer of Cal Dive, said, "Canyon has specified its systems for the offshore construction industry in contrast to the drill rig support
ROVs of their competitors. John Edwards,
Martin O'Carroll and the rest of the Canyon team add considerable industry experience and management depth, particularly in the international arena. We also see the opportunity to add value by deploying CDI vessels to support
Canyon ROV operations."