Aegion Corp. completed the sale of its 51 percent interest in Bayou Perma-Pipe Canada Ltd., a pipe coating company in western Canada, on Feb. 4 to its joint venture partner MFRI Inc. for $9.6 million USD. The company also expects to complete its company-wide cost reduction initiative and close the acquisition of Underground Solutions Inc. in the coming weeks.
“In light of expectations for a prolonged low oil price environment, we have proactively taken action to reduce our exposure in high oil extraction cost regions of the North American upstream market,” said , Aegion president and CEO Charles R. Gordon. “The sale of Corrosion Protection’s Canadian pipe coating joint venture completes the upstream repositioning that also included downsizing Energy Services’ operations in Central California.”
In total, Aegion’s downsizing efforts will reduce the company’s annual upstream revenues by approximately $100 million, Gordon added. As part of this plan, Aegion is also reducing annual operating expenses across the company by approximately $15 million. Gordon expects to complete the majority of those actions during the first quarter of 2016.
“While we adapt to the current reality in the energy markets, we continue to focus on enhancing our long-term growth opportunities,” he said. “The acquisition of Underground Solutions Inc. advances one of our strategic initiatives to build a strong portfolio of technologies in the growing North American trenchless pressure pipeline rehabilitation market. I am confident these are the right moves to position Aegion for these market conditions and improve our prospects for long-term growth.”