CALGARY, Sept. 11 /CNW/ -- Pason Systems Inc. ("Pason") is pleased to announce that effective today, it has signed a definitive agreement to acquire privately held Petron Industries Inc. ("Petron"), a designer and manufacturer of drilling rig instrumentation systems. Headquartered in Houston, Texas, Petron offers sales and rental of drilling rig instrumentation systems for both on and offshore applications. Currently Pason and Petron compete with each other in the U.S. land market where Petron has approximately 15% of the rig rental base of Pason with a similar, but slightly reduced set of instrumentation products. Under the terms of the agreement, Pason, through a wholly-owned U.S. subsidiary, will acquire a 100% interest in Petron, paid fully in cash, with closing expected to occur October 2, 2009.
The Petron acquisition is a relatively minor expenditure for Pason and will not deliver meaningful EBITDA in the near future given the current depressed conditions in the drilling market. However, this transaction will compliment Pason's business in a number of areas setting the base for greater earnings in future periods when oilfield service activity is expected to rebound. Some of the areas where the acquisition is expected to make a positive contribution to Pason are:
1. Technology - Petron has recently upgraded its hardware and software
platforms using ideas that Pason has considered but not yet
implemented due to the vastly more challenging task of upgrading
Pason's much larger fleet of equipment. The Petron technology and
excellent R&D team permits Pason to verify many key technical
assumptions thereby reducing risk and ultimately the completion time
for its own upgrade path.
2. Marketing - Petron has an excellent marketing staff that has
developed strong relationships with Operators and Contractors
primarily working in Texas and Louisiana. Pason expects to leverage
these skills, relationships, and the combined product offering into
widening the gap between itself and its competition.
3. International/Offshore - Petron has an immediate solution for
offshore instrumentation and control panels which fills a hole in
Pason's product suite. This provides an opportunity for Pason to meet
the needs of customers who require either a rental or a purchased
offshore integrated instrumentation solution. In addition, Petron's
network of agents that market and distribute instrumentation in the
eastern hemisphere will greatly enhance Pason's limited
representation in these areas.
Pason Systems Inc. is the world's largest provider of rental oilfield instrumentation systems that are designed and manufactured for use on land-based drilling and service rigs. With the Petron addition, Pason looks to expand in its current market plus add growth in offshore rentals and sold instrumentation systems.
Pason's common shares trade on the Toronto Stock Exchange under the symbol PSI. For additional information visit the website at www.pason.com.
Certain information regarding the Company contained herein may constitute forward-looking statements under applicable securities laws. Such statements are subject to known or unknown risks and uncertainties that may cause actual results to differ materially from those anticipated or implied in the forward-looking statements.
