Applus+ to sell its oil and gas business in the USA
25/07/2023
Applus+, a global testing, inspection and certification company, has announced that it has signed an agreement to sell 100% of its non-destructive asset testing and inspection business and operations in the USA that served primarily the oil & gas industry. The sale is to a financial investor and completion is subject to regulatory approvals and customary conditions and is expected to take place in the next few months.
The business generated revenue of approximately €100 million (approximately £85 million) in 2022 with an operating loss, trading under challenging and competitive local market conditions over the last few years.
The disposal proceeds are non-material; however, on completion of the transaction, the group’s profitability and return on capital employed will improve and the remaining businesses of Applus+ in North America, now accounting for around 10% of the group’s revenue, will continue to have strong growth and margin potential.
With this transaction, Applus+ strengthens the quality of its portfolio. In the last few months, Applus+ has announced three disposals of underperforming operations, with 2022 revenue sold of more than €150 million (approximately £128 million). Furthermore, since the strategic plan was announced in November 2021, Applus+ has made seven acquisitions, in addition to the purchase of the 20% minority share interest in the statutory vehicle inspection business in Galicia, Spain, not already owned. In total, so far, approximately €100 million (approximately £85 million) has been invested in strategic areas of the portfolio that enhance the service offering towards more sustainable and higher growth and margin businesses.
Javier López Serrano, Executive Vice President of Energy & Industry Division at Applus+, said: “I would like to extend my thanks to all of those that have worked so hard in our US oil & gas operations, providing an excellent quality of service to our customers. I am confident the business is well placed to continue to provide essential services to these customers and society.”
Joan Amigó, Chief Executive Officer of the Applus+ group, said: “I am pleased to announce this transaction, which again shows our commitment to deliver the strategic plan, including our strategy of accelerating our active portfolio management to strengthen our business mix to drive sustained value creation.”
