Hunting Plc, the international energy services group, said Aug. 16 it has completed the acquisition of the business and assets of RTI Energy Systems Inc. (RTIES) for a total cash consideration of $12.5 million. The consideration payable has been funded from Hunting’s existing cash resources.

RTIES is a manufacturer of production riser technologies for deepwater applications within the offshore oil and gas industry. RTIES’s product portfolio incorporates proprietary technology and know-how which is protected by a number of patents. RTIES is unique within the industry as the only supplier of titanium stress joints, providing a more reliable, compact and lower total cost alternative to flexible joints and steel tapered stress joints.

RTIES’s customer base includes major exploration and production groups and primary suppliers to the industry. In addition to these product lines, RTIES generates revenue from the fabrication and precision machining of components used in the oil and gas industry, as well as providing inspection and maintenance services for customers. RTIES has historically focused its business on the Gulf of Mexico with its products being used in many deepwater and ultradeepwater projects in the region. RTIES is an operating subsidiary of Arconic Inc., a global leader in lightweight metals engineering and manufacturing based in the U.S.

RTIES operates from a single site facility in Houston with 87,000 sq ft of covered operating floor space, and currently employs 21 personnel. It is anticipated that key members of the senior management team will continue with Hunting.

Hunting’s valuation of the balance sheet of RTIES has net assets of about $13 million which underpins the consideration being paid. Based on U.S. GAAP management accounts, for the year ended December 2018, RTIES recorded revenues of $7.1 million which generated an operating loss. Historically RTIES has generated profits at good margins and in 2014 and 2013, RTIES recorded revenues of $49.2 million and $85.5 million respectively.

 “Given the new offshore deepwater projects being commissioned within the U.S., Brazil and Guyana, RTIES, which will sit alongside and complement our subsea operations, will provide Hunting with an enlarged product offering into the recovering deepwater offshore market,” Jim Johnson, Hunting’s CEO, said.

Law firm Locke Lord LLP represented Hunting in its acquisition of oil and gas assets from RTI Energy Systems. The Locke Lord team was led by Walker Clarke. Calash, a strategy and M&A advisory firm focused on the energy and industrials sectors, advised Arconic on the sale of its RTIES subsidiary to Hunting.