Dynamic Materials Acquires Canadian LRI Oil Tools
October 02 2009 - 7:00AM
Marketwired
Dynamic Materials Corporation (DMC) (NASDAQ: BOOM), the world's
leading provider of explosion-welded clad metal plates and a
growing participant in the worldwide oilfield products industry,
today announced it has acquired 100 percent of the stock of
Alberta, Canada-based LRI Oil Tools Inc. (LRI). The cash and stock
transaction is valued at approximately US$650,000, and includes
9,584 shares of DMC restricted common stock. DMC intends to make an
additional capital contribution of approximately US$2.2 million
into the LRI business to reduce indebtedness and enhance working
capital.
LRI, parent company of LRI Perforating Systems Inc., produces
and distributes perforating equipment for use by the oil and gas
exploration and production industry. The business has had a
long-term strategic relationship with DMC's Oilfield Products
segment, and has served for several years as its sole Canadian
distributor. LRI employs a staff of approximately 25, and DMC
expects to retain its current management team.
Yvon Cariou, DMC's president and CEO, said, "This acquisition
strengthens our presence in a strategically important region that
is poised for long-range growth. In addition to expanding our
product portfolio, LRI improves our distribution platform and
immediately enhances our access to a broad spectrum of North
American energy companies. Over the long-term, we expect this
acquisition could also provide us with a springboard into other
geographic end markets."
From 2006 through 2008, LRI recorded average annual sales of
approximately CAD$10.6 million and average gross margins of
approximately 33%, which are comparable to the historic gross
margins of DMC's Oilfield Product segment. Although the global
economic downturn is expected to negatively impact LRI's sales and
gross margins in 2009, DMC management is optimistic about its
long-term prospects for growth.
"A June 2009 report from the Canadian Energy Research Institute
forecasts that the Canadian energy exploration and extraction
market will grow by 50 percent during the next three years and by
70 percent over the next seven years," said Rolf Rospek, CEO of
DMC's Oilfield Products segment. "Given LRI's product portfolio,
strategic network of distribution centers and solid customer
relationships, we believe this acquisition represents an ideal fit
with our business."
About Dynamic Materials Corporation
Based in Boulder, Colorado, Dynamic Materials Corporation is a
leading international metalworking company. Its products, which are
typically used in industrial capital projects, include
explosion-welded clad metal plates and other metal fabrications for
use in a variety of industries, including oil and gas,
petrochemicals, alternative energy, hydrometallurgy, aluminum
production, shipbuilding, power generation, industrial
refrigeration and similar industries. The Company operates three
business segments: Explosive Metalworking, which uses proprietary
explosive processes to fuse different metals and alloys; Oilfield
Products, which manufactures, markets and sells specialized
explosive components and systems used to perforate oil and gas
wells; and AMK Welding, which utilizes various technologies to weld
components for use in power-generation turbines, as well as
commercial and military jet engines. For more information, visit
the Company's websites at http://www.dynamicmaterials.com and
http://www.dynaenergetics.de.
Safe Harbor Language
Except for the historical information contained herein, this
news release contains forward-looking statements, including growth
of the Canadian energy exploration and extraction market, LRI's
prospects for growth, expectations about 2009 and future sales and
margins of LRI, as well as plans and amounts to reduce
indebtedness, which involve risks and uncertainties. These risks
and uncertainties include, but are not limited to, demand for LRI's
products (which in part is dependant on oil and gas prices and
future oil and gas exploration activity) and the Company's ability
to successfully integrate LRI with its Oilfield Products segment,
as well as the other risks detailed from time to time in the
Company's SEC reports, including the report on Form 10-K for the
year ended December 31, 2008.
CONTACT: Pfeiffer High Investor Relations, Inc. Geoff High
303-393-7044
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