Gulf Island Fabrication, a top steel fabricator and service provider for the industrial and energy sectors, announced it closed the acquisition of the company Dynamic Industries, a leading services, and industrial staffing business.
Firstly, the acquisition was a cash transaction for a price of $8 million. According to the statement, such a price represents around three times the operating income of the business, excluding its working capital.
Accordingly, the company expects to experience an increase in working capital after the acquisition of approximately $5 million to $8 million; depending on revenue volume over the next three to six months.
Moreover, the acquisition aimed to expand Gulf Island’s services business; diversify its offerings to include coatings, scaffolding, and specialty services such as torquing and hydro-testing.
In addition, the transaction will also provide strong revenue and synergy opportunities to the company. It will allow for a potential cross-sell expanded services offerings to a broader customer base; while also providing the opportunity to pull-through fabrication work to DSS’s customers.
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Gulf Island to increase its skilled workforce
Furthermore, it will increase the company’s skilled workforce. In fact, it will nearly double the company’s craft labor headcount; expand its geographic footprint for craft labor to include South Texas and Western Louisiana.
Also, it will provide for Gulf Island the entry to the industrial staffing market; which will further help attract and retain craft personnel. Richard Heo, Gulf Island’s CEO, said about the matter. “The acquisition of DSS is another important step in our strategic transformation as it will help us move closer to our goal of generating stable, profitable growth.”
He also commented. “The transaction further strengthens our services business by adding long-standing customer relationships to our existing customer base, as well as providing new services offerings and creating attractive revenue synergies.”
Finally, Westley Stockton, Gulf Island’s Chief Financial Officer, said. “The addition of DSS will add necessary scale and help us further leverage our existing services business, while the complementary services of the two organizations will drive incremental growth over time.”