- Shawcor (SCL) has sold its Pipeline Performance Products business as it refines its operations in pursuit of long-term growth
- The business was bought by Seal For Life Industries – a platform of New York-based Arsenal Capital Partners – for US$91.5 million (C$117.37 million)
- Pipeline Performance Products includes the Canusa-CPS and Dhatec segments, as well as other assets across Europe and the Middle East
- It generated a total of approximately US$85 million (C$109.03 million) in revenue in 2019
- Shawcor is currently up 1.75 per cent to C$3.48 per share
Shawcor (SCL) has sold its Pipeline Performance Products business as it refines its operations in pursuit of long-term growth.
It was purchased by Seal For Life Industries – a platform of New York-based private equity firm Arsenal Capital Partners – for US$91.5 million (C$117.37 million), subject to working capital adjustments.
Pipeline Performance Products generated roughly US$85 million (C$109.03 million) in revenue in 2019 through two core segments: Canusa-CPS, which manufactures heat shrinkable sleeves, adhesives and liquid coatings for pipeline joint protection, and Dhatec, which designs and assembles engineered pipe logistics products and services.
The business also owns a number of other assets across Europe and the Middle East.
Steve Orr, President and CEO of Shawcor, said Pipeline Performance Products had provided stable returns for many years, but noted it had recently presented limited strategic alignment with the company’s “forward-looking direction.”
“Furthermore, the sale of the business allows the company to focus on areas where it has the greatest differentiation opportunity for long term growth and serves to remove complexity from the organisation,” he added.
According to the announcement, Shawcor plans to use the proceeds to fund its growth initiatives and strengthen its balance sheet in preparation for next year.
The Toronto-based company released its third quarter financial results last month, which outlined a 32 per cent drop in revenue from C$394 million in the same period of 2019 to C$268 million.
Adjusted EBITDA also fell 58 per cent, from C$42.4 million to C$17.8 million, culminating in a net loss of C$18.3 million compared to a profit of $6.5 million last year.
Shawcor is currently up 1.75 per cent to C$3.48 per share at 10:08am EST.