Chart Industries acquires LA Turbine
ATLANTA, July 01, 2021 (GLOBE NEWSWIRE) – Chart Industries, Inc. (“Chart”) (NYSE: GTLS) today announced the acquisition of LA Turbine (“LAT” or “LA Turbine”) for $ 80 million dollars in cash (subject to certain customary adjustments). LA Turbine is a global leader in the design, engineering, manufacture, assembly and testing processes of turbochargers for new and aftermarket equipment, with significant in-house engineering expertise.
Extenders are used in the following Chart offerings, and with LAT in the Chart portfolio, we can now offer a more complete ‘one-stop-shop’ solution and provide more options to our customers in these applications:
- Hydrogen and helium liquefaction
- Carbon capture and energy storage
- Industrial gas
- Natural gas processing
- Small-scale LNG plants
- Propane dehydrogenation plants (PDH)
- Heavy hydrocarbon removal process for LNG plants
This acquisition aligns with our inorganic investing principles and contributes to our financial growth and strength through increased revenues and earnings. LAT’s capabilities are a natural fit and provide a competitive point of differentiation for Chart. There is a very unique expander required for liquefying hydrogen and helium which is difficult to obtain in the market due to a limited number of companies like LAT who are able to design and build it. produce. Additionally, over the past three years, the remaining qualified suppliers have been acquired by companies that only use their hydrogen and helium turboshaulers for dedicated internal purposes (i.e. stopping sales. to third parties). These highly specialized expanders are difficult to design and produce as they require very high efficiency machines, in some cases oil free, foil bearings for factories producing 10 tons per day and less, and magnetic bearings for large factories. liquefaction of helium and hydrogen. In addition, this part of the liquefier is one of the longest items of one to two years depending on the configuration. LA Turbine has these capabilities in-house and our possession of these capabilities will position us better to win liquefaction projects and deliver them in significantly shorter time frames, another differentiator in the expanding liquefaction market.
“This is an exciting time for Chart and LA Turbine as we are now working together to provide our customers with extensive solutions across multiple molecules, including almost all types of power sources and multiple industrial gas applications,” said Jill Evanko, CEO and Chairman of Chart. “LA Turbine is one of the only turbo-regulator engineering and manufacturing companies able to design and produce highly specialized regulators; one of the longest lead times in the hydrogen and helium supply chain. With this in-house capability, we further differentiate ourselves in liquefaction, not only through decades of experience, but also through world-class efficiency and now significantly shorter and guaranteed delivery times.
Pair the above complementary nature of the business with the fact that our companies have worked together for many years and we expect to have immediate and significant synergies, including extensive on-site service and repair capabilities (LAT is the world leader in servicing all brands of turbochargers).
“Since our inception, LA Turbine has focused on being the premier turboexpander solution provider, as an OEM of high-tech rotary equipment designs and process solutions for customers in the industry. engineering, procurement and construction and end user operators as well as aftermarket, maintenance and repair. With Chart, we can both capitalize on emerging market opportunities while improving and expanding the reach of the value chain to our collective customers through our people, technology, infrastructure and financial assets, “said Danny Mascari, President of LA Turbine.” In addition, we remain committed to providing FX- after-sales service. Top-of-the-range TURBO that our turbo expansion valve customers know and expect.
Additionally, this acquisition builds on other recent additions to our portfolio, including the helium and hydrogen liquefaction capabilities of Cryo Technologies which will also use LA Turbine equipment. Our two companies have very active commercial order pipelines and there are many demands for hydrogen liquefaction and processing as well as a variety of energy projects.
LAT is expected to be immediately accretive for Chart, with a positive 2021 impact on full-year guidance that will be shared during Chart’s second quarter 2021 results call which is scheduled for July 22, 2021. At the By 2022, when we increase our benefits, LA Turbine is expected to generate between $ 40 million and $ 50 million in revenue and $ 0.20 to $ 0.30 in undiluted earnings per share on approximately 35.5 million weighted shares outstanding (assuming 18% tax rate). In addition, our total addressable market (“TAM”) for our specialty products grew by $ 350 million with this acquisition – the result of the expansion of TAM for hydrogen liquefaction, hydrogen liquefaction. helium and carbon capture with energy storage. This addition brings the total size of our short-term specialty products market to $ 6.6 billion.
Winston & Strawn LLP acted as legal counsel to Chart on the transaction. No investment banker was involved in this transaction.
Chart will host a call to investors to browse the additional presentation included in this release on Thursday, July 1, 2021 at 9:30 a.m. Eastern Time. Participants can join the conference call by dialing (877) 312-9395 within the United States or (970) 315-0456 from outside the United States, entering conference ID 3549935. Please log in or log in at least five minutes before the start. time. A recorded replay of the conference call will be archived on the Company’s website, www.chartindustries.com. You can also listen to a recorded replay of the conference call by dialing (855) 859-2056 in the United States or (404) 537-3406 outside the United States and entering the conference ID 3549935.
About Chart Industries, Inc.
Chart Industries, Inc. is one of the world’s leading independent manufacturers of advanced equipment serving multiple applications in the energy and industrial gas markets. Our unique product portfolio is used in every phase of the liquid gas supply chain, including upstream engineering, maintenance and repair. Being at the forefront of the clean energy transition, Chart is a leading supplier of technologies, equipment and services related to liquefied natural gas, hydrogen, biogas and CO2 capture, among other applications. We are committed to excelling in environmental, social and corporate governance (ESG) issues for both our business and our clients. With more than 25 global locations from the United States to Asia, Australia, India, Europe and South America, we maintain accountability and transparency to our team members, suppliers, our customers and our communities. To learn more, visit www.chartindustries.com.
About LA Turbine
THE Turbine designs and manufactures highly technical and application specific turbochargers used in hydrocarbon processing, geothermal energy production, industrial gases, energy recovery and refrigeration applications. The company’s global FX-TURBO field service team provides 24/7 aftermarket repair, overhaul and maintenance for all brands and configurations of turbochargers. Headquarters are located in Valencia, California, with sales and service support in the United States and around the world through a network of partners on five continents. Since 2003, LAT has provided after-sales service to thousands of global suppliers and since 2007, has designed and delivered over 150 LAT turbo-regulators and commissioned over 100 LAT units. To learn more, visit www.LATurbine.com.
Certain statements made in this press release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements regarding the business plans of the Company, including statements regarding pending acquisitions. and completed and minority investments, cost synergies and efficiency savings, targets, future orders, revenues, margins, profits or performance, liquidity and cash flow, capital expenditures, business trends, the extent of product offerings in the market, government initiatives, including executive orders and other information that is not of a historical nature. Forward-looking statements may be identified by words such as “may”, “will”, “should”, “could”, “expects”, “anticipates”, “believes”, “plans”, “forecasts”, “Outlook,” “direction”, “continue”, “target” or the negative of these terms or comparable terminology.
The forward-looking statements contained in this press release or in other statements made by the Company are based on the expectations and beliefs of management regarding future events affecting the Company and are subject to uncertainties and factors. related to the operations and the business environment of the Company, which are difficult to predict and many of which are beyond the control of the Company, which could cause the actual results of the Company to differ materially from those expressed or implied by forward-looking statements. Factors that could cause the Company’s actual results to differ materially from those described in forward-looking statements include: the Company’s ability to successfully integrate recent acquisitions (including the LAT acquisition) and minority investments , and to realize the income, profits, growth and other advantages of such acquisitions and minority interests (including with respect to the Company’s ability to sell to companies in which it has invested and to their clients); risks related to the continued uncertainty associated with the coronavirus (COVID-19) and other factors discussed in Section 1A (Risk Factors) of the Company’s most recent annual report on Form 10-K filed with the SEC and quarterly reports on Form 10-Q, which should be carefully reviewed. The Company assumes no obligation to update or revise any forward-looking statements.
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