MOBILE power generation firm Aggreko has continued its strategy of countering its exposure to the fragile oil and gas industry with the acquisition of the assets of the US industrial climate-control firm Dryco.
Less than a week on from seeing £400m wiped from its value after announcing a 30 per cent fall in interim profits, Aggreko has signalled its intent to further grow its temperature-control operations, by picking up the Illinois-based specialist.
Dryco works across moisture control, drying, heating, industrial and structural dehumidification, and cooling applications within the shipping, manufacturing, food processing, construction, and industrial painting industries.
Glasgow-based Aggreko reported 15 per cent growth in its temperature control business for the six month ending June 30, against group sales down 12 per cent.
No financial details of the deal were released, but Dryco posted revenue of $19 million in 2015. The company’s 60 staff along with 6,000 fleet assets, will move to Aggreko’s rental solutions business upon completion of the deal.
Chris Weston, Aggreko chief executive, said: "This acquisition combines the deep technical strength of two highly respected market leaders and provides our customers with an unparalleled range of solutions that can address their HVAC (heating ventilation and air-conditioning) and moisture control needs.”
Like its 2015 acquisition of Canadian heating specialist ICS, Aggreko will integrate the operations from Dryco’s ten full service locations into its North America business, while developing expansion plans to enter additional sectors and global markets.
In its interim results for the six months ending June 30, Aggreko’s rental business delivered revenue of £280m, down eight per cent on an underlying basis. Trading profit collapsed by 70 per cent to £10m. The reductions were blamed on a reduction of the price of Crude, which saw North American revenue fall 20 per cent.
In its interim management report, Aggreko said it remained committed to growing other product lines, including temperature control and ancillary products like loadbanks, both of which allow for the provision of associated power.
Mr Weston added “[The acquisition] also gives Aggreko an opportunity to further support our rapidly expanding customer base within the shipping, food & beverage, and painting & coatings industries."
News of the acquisition edged Aggreko shares up just under one per cent, or 9p, to 1,105p.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules here