Metalworking company Dynamic Materials Corp. (BOOM) said that it has acquired 100% of the stock of Alberta, Canada-based LRI Oil Tools Inc. The cash and stock transaction is valued at about US$ 650 thousand and includes 9,584 shares of DMC restricted common stock.
LRI, parent company of LRI Perforating Systems Inc., produces and distributes perforating equipment for use by the oil and gas exploration and production industry. The business has had a long-term strategic relationship with Boulder, Colorado-based DMC's Oilfield Products segment, and has served for several years as its sole Canadian distributor. LRI employs a staff of approximately 25, and DMC expects to retain its current management team.
From 2006 through 2008, LRI recorded average annual sales of about C$10.6 million and average gross margins of approximately 33%.
Rolf Rospek, CEO of DMC's Oilfield Products segment said, "A June 2009 report from the Canadian Energy Research Institute forecasts that the Canadian energy exploration and extraction market will grow by 50 percent during the next three years and by 70 percent over the next seven years."
Rospek believes that this acquisition represents an ideal fit with its business, given LRI's product portfolio, strategic network of distribution centers and solid customer relationships.
DMC intends to make an additional capital contribution of about US$ 2.2 million into the LRI business to reduce indebtedness and enhance working capital.
BOOM is currently trading at $18.12, down 45 cents or 2.42%.
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