(GFCI) receives several offers: "Grifco International Considers Merger and Acquisition Offers from the United States, the United Kingdom, and Libya
Thursday June 8, 2:22 pm ET
HOUSTON--(BUSINESS WIRE)--June 8, 2006--Grifco International Inc. ("Grifco" or the "company") ( GFCI - News) announces that it is reviewing several offers to merge or to be acquired. Current offers originating from the United Kingdom, the United States and Libya range from GBP 28 million British pounds (USD $49 million equivalent) to GBP 36 million British pounds (USD $59 million equivalent). "The timing to move on Libya with Lyamec was a catalyst for the merger and equity investment overtures. Now that Libya has fully normalized diplomatic relations with the United States, oil prices, oil service companies, and especially oil service companies with a footprint in the Middle East, are at a premium," stated Jim Dial, president and CEO of Grifco International.
Libya's highest priority is increasing oil and gas production through the revitalization and overhaul of underperforming oil fields with proven reserves to their previous production levels. Libya's expanding onshore/offshore exploration and production has created robust demand and a growing market for American oil equipment and services. In a statement issued by RG Raymond, interim CEO of Lyamec Corp., "While we regard this as a positive development, we will carefully review our options to ensure the basis of any transaction falls within the parameters of our objective to effect managerial change at Grifco." Adding, "Clearly, the positive political climate both here and in Libya places an improved position on the options."
The Global Oil Tools Libya facility in Misurata is strategically located to provide ready access to critical key distribution points from which Global can deliver tools to regional customers on a just-in-time basis. Global's advantage in North Africa is the ability to provide a localized, fully integrated development, manufacturing and shipping facility over competitors shipping tools from distant distribution centers. "Given the geography of the regions and Lyamec's approach to the vast opportunities on current Libyan projects, Grifco requires a 'finesse approach' to restructuring operations and policies. While some aspects of the negotiations could complicate the chances for closing a deal, the participants should be able to see eye to eye for a successful outcome and one has to ask how easily three cultures can collaborate," stated Ben Gala of American Finance Corp.
In anticipation of the additional volume from Libyan and other customers, Global Oil Tools is within reach of accepting additional orders through recently acquired additional CNC machines and ongoing installations of enhanced order processing and management systems. Global expects this modernization to provide the company with the capacity to rapidly fulfill current back orders and future volume projected from recently reinvigorated oil and gas wells left stagnant in Libya since the mid-1980s. Over the last year, a preponderance of stagnant oil wells throughout the world are under redevelopment, taking advantage of the record rise in oil prices and creating a significant demand for oil and gas well maintenance and overhaul tools, such as those patented and manufactured by Global.
About Grifco International Inc.
Grifco International is a leading provider of oil and gas services equipment, specializing in the conception, architecture, and development of tools for the coil tubing, wire line, and snubbing industry throughout the United States, China, Mexico, South America, the Middle East and Africa. Grifco holds and owns design rights and manufacturing facilities for producing more than 6,000 products for the oil and gas industry with more than 150 clients, boasting the biggest names in the business, including Halliburton, Exxon Mobil Corp., and Schlumberger.
