Metal processor Worthington Industries’ (WOR) Pressure Cylinders unit has agreed to buy a 75% stake in leading liquefied natural gas (LNG) company ARITAS. The deal, which is subject to the clearance of the Turkish government, is expected to close in late Jan 2014.
Turkey-based ARITAS, which had annual sales of roughly $40 million, is among Europe’s top LNG and cryogenic technology companies. The entity, which employs nearly 300 people, offers a broad array of cryogenic vessels, systems and services. LNG products represent majority of ARITAS’ revenues.
ARITAS has been engaged in constructing and servicing the virtual LNG pipeline in Turkey for nearly a decade. It is also an emerging leader in LNG fueling systems including those for natural gas powered marine vessels.
ARITAS, which currently operates a 270,000 square-foot manufacturing plant in Istanbul, is looking to construct a new state-of-the-art facility in Bandirma. In addition to enhancing the accessibility of target markets, the new plant will offer increased capacity with potential for future expansion.
Following the stake purchase, Worthington's home grown liquid cylinder offering will be complemented by ARITAS' vast range of industrial gas products (including engineered tanks and transport trailers). ARITAS' expertise and strong product lineup will provide Worthington significant opportunity to expand its LNG and cryogenics businesses globally.
Worthington, which is among the leading players in metal processing and fabrication industry along with Precision Castparts Corp. (PCP), CIRCOR International, Inc. (CIR) and NN Inc. (NNBR), saw a 24% year over year rise in revenues to $769.9 million in second-quarter fiscal 2014 (ended Nov 30, 2013), driven by higher volumes stemming from acquisitions. The company saw strength across its Steel Processing and Pressure Cylinders divisions in the quarter.
Worthington remains positive about fiscal 2014 and continues to expect growth both organically and from acquisitions. The company is witnessing strength in the automotive space and improvements across commercial construction and agriculture markets.
Worthington will remain committed to invest in new and growing markets, develop new products for customers and drive improvement across its businesses.
Worthington currently carries a Zacks Rank #2 (Buy).