Mullen Group Ltd. announced today a number of transactions that will expand its fluid handling and hauling capabilities in northern Alberta and northeastern British Columbia.
"Acquiring businesses leveraged to fluid hauling and the production services segment of the oil and gas industry has been a strategic focus of the Mullen Group for several years. New drilling techniques and multi-stage fracturing are creating new opportunities associated with the development of resource plays throughout North America. These acquisitions provide Mullen Group with additional equipment and an experienced workforce enabling our existing production services businesses to service the needs of our customer base," stated Murray Mullen, Chairman and CEO.
Mullen Group closed the acquisition of Radium Industrial Solutions GP Ltd. in November, a fluid hauler based in Grande Prairie. This business is being operated as part of Cascade Energy Services L.P. ("CES") and has expanded CES's operations in the Grande Prairie region.
Mullen Group has also entered into an agreement to acquire Panda Tank & Vac Truck Services Inc. ("Panda") a fluid hauler also based in Grande Prairie. The agreement is subject to, among other things, Mullen Group's completion of its due diligence. This transaction is scheduled to close January 1, 2011. Panda will be operated as a stand-alone business unit and will strengthen Mullen Group's market presence in and around Grande Prairie, Fort St. John and Dawson Creek, while also expanding Mullen Group's geographic reach into Grande Cache.
Furthermore, Mullen Group has entered into a letter of intent to acquire additional fluid hauling assets from a private company based in northern Alberta, which we expect to close in early January, 2011. These assets will be integrated into Mullen Group's existing fluid hauling businesses.
"The addition of these three businesses to our fluid hauling operations not only expands the geographic coverage we can provide to our customers, it provides us with an opportunity to leverage our existing infrastructure to achieve economies of scale. We anticipate that these three acquisitions, once completed, will increase Mullen Group's annual consolidated revenues by approximately $42.0 million. In terms of operating profitability we expect these businesses will generate operating income (EBITDA) margins similar to Mullen Group's current margins within the first six months of the acquisition," said Steve Lockwood, President and Co-CEO.
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