MISSION WOODS, Kan., Aug. 25, 2010 (GLOBE NEWSWIRE) — Layne Christensen Company (“Layne”) (Nasdaq:LAYN) today announced the acquisition of a 50% interest in Diberil Sociedad Anonima, a Uruguayan company and parent company to Costa Fortuna (Brazil and Uruguay). Costa Fortuna, with operations in Sao Paulo, Brazil and Montevideo, Uruguay, is one of the largest providers of specialty foundation and specialized marine geotechnical services in South America. Layne has mineral exploration operations already in Brazil and sees the expansion of its geotechnical construction business into this market as a very strategic opportunity. Costa Fortuna, with 250 employees, produced approximately $25 million in revenue and $4.5 million in earnings before interest, income taxes, depreciation and amortization for the year ended December 31, 2009. Layne’s investment for its 50% interest included the purchase of shares from individuals for $10.1 million and the purchase of shares directly from Diberil for $4.8 million resulting in, net of Layne’s interest in Diberil, an economic investment of $12.5 million. Subsequent to the acquisition, both shareholders contributed $1.25 million in cash for working capital. In addition, and as part of this transaction, Diberil purchased from Layne 100% of the stock of Layne GeoBrazil for $4.8 million. Layne will record activity from its investment in Diberil as equity in earnings of affiliates.
Peter Iovino, Layne GeoConstruction Division President, said, “This acquisition adds capacity to Layne’s strategy of expanding its geotechnical expertise in ground stabilization product lines. Costa Fortuna operations complement Layne’s current product offerings and expands those offerings, especially, in marine geotechnical and slurry wall construction. We are extremely pleased to add the Costa Fortuna entities to the Layne GeoConstruction family.”
Aldo Corda, President of Costa Fortuna, said, “Our relationship with the management of Layne GeoConstruction goes back many years. We are looking forward to working with them once again and to expanding Layne’s geotechnical construction capabilities into our South American markets.”
Costa Fortuna was recently awarded a construction contract for 270,000 square ft. of reinforced concrete slurry walls by one of the largest mining companies in the world. The construction of the slurry walls will allow the excavation of a large collection pit that will receive and store iron ore that arrives from a mine by train and subsequently loaded on ships by conveyors. Management believes this is the first time in South America that the “Hydromills” trench cutting technique will be used in such a large scale project. The project value is estimated to be approximately $22 million in labor and $20 million in materials (steel/concrete) and it should be completed over the next several months.
Costa Fortuna operates as a specialty marine contractor or subcontractor to heavy civil constructors and construction managers in connection with governmental and industrial construction projects throughout Brazil, Uruguay and other South America countries. From design through construction, Costa Fortuna provides an array of services to address complex civil construction foundations and soil stabilization issues.
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act of 1934. Such statements may include, but are not limited to, statements of plans and objectives, statements of future economic performance and statements of assumptions underlying such statements, and statements of management’s intentions, hopes, beliefs, expectations or predictions of the future. Forward-looking statements can often be identified by the use of forward-looking terminology, such as “should,” “intended,” “continue,” “believe,” “may,” “hope,” “anticipate,” “goal,” “forecast,” “plan,” “estimate” and similar words or phrases. Such statements are based on current expectations and are subject to certain risks, uncertainties and assumptions, including but not limited to prevailing prices for various commodities, unanticipated slowdowns in the Company’s major markets, the risks and uncertainties normally incident to the construction industry and to the exploration for and development and production of oil and gas, the impact of competition, the effectiveness of operational changes expected to increase efficiency and productivity, worldwide economic and political conditions and foreign currency fluctuations that may affect worldwide results of operations. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially and adversely from those anticipated, estimated or projected. These forward-looking statements are made as of the date of this release, and the Company assumes no obligation to update such forward-looking statements or to update the reasons why actual results could differ materially from those anticipated in such forward-looking statements.
Layne Christensen Company provides products and services for the water, mineral, construction and energy markets.
