Worley (ASX: WOR) has just announced a UK acquisition called 3sun to diversify its business further, is the share price a buy?
Worley is a global professional services company which provides expertise in engineering, procurement and construction in the hydrocarbons, power, infrastructure, mining and minerals, and chemical sectors. The company employs approximately 57,600 people across 51 countries.
Worley’s UK Acquisition
Worley is buying 3sun Group Ltd, a UK based offshore wind energy installation, inspection and maintenance for an enterprise value of £20 million.
3sun has a 25% market share of offshore wind turbine installation, maintenance and inspection services in the UK, with 15% of this market in Europe. It has installed over 4,000 wind turbines and is inspecting over 70,000 of the UK’s offshore wind turbines.
Over 80% of its revenue is recurring from ‘Tier 1’ operators under long term agreements. Two of the clients include Royal Dutch Shell and E-On.
Management said that 3sun will give Worley a leading position in the “high growth” offshore wind energy services sector in the UK and Europe.
According to Worley, its large financial strength and technical expertise will allow Worley to extend 3sun’s capabilities to larger projects and longer term operations & maintenance (O&M) contracts.
Another reason for the acquisition is that it could lead to expansion in North America and Asia Pacific through the combination of 3sun’s capability with Worley’s global presence.
The final benefit of the acquisition is that Worley’s data analytics and management capability will provide additional benefits to 3sun customers.
Worley CEO Andrew Wood said: “We are excited by the opportunities that are presented by the 3sun acquisition. We are pleased to enter into the UK and European offshore wind energy markets via one of the leading providers of O&M services.
“We believe that the combination of Worley’s international platform and 3sun’s expertise will provide a catalyst for us to grow a global O&M business in the offshore wind market. The acquisition demonstrates Worley’s commitment to the renewables sector in the energy transition.”
Is The Worley Share Price A Buy?
The Worley share price has gone up around 1% in reaction to this news. It’s not a huge deal in context of Worley’s overall size, but it does open up new growth avenues.
Worley has made a few acquisitions recently, so I’d want to see it integrate these well over the next 12+ months before thinking about buying shares. Sometimes overseas acquisitions can be troublesome, so that’s why I would rather buy the reliable growing shares in the free report below.
At the time of publishing, Jaz does not have a financial interest in any of the companies mentioned.