Bateman Litwin N.V., a mid-sized Oil, Gas, Power and Renewable Energy EPC (engineering procurement and construction) contractor, is acquiring US-based Delta-T Corporation, a leading builder of ethanol plants, for US$45 million in cash and 11.8 million new ordinary shares in Bateman Litwin.
Delta-T is one of the world’s leading designers of alcohol plants and refining systems that focus on low-cost production and minimal environmental footprint. Its grain-to-ethanol plants produce no process waste water, and the water consumption is a world-leading 2.8 gallons per gallon of undenatured ethanol (vs. an industry average of 4.5 – 10 gallons).
Delta-T’s newest Dried Distillers Grains with Solubles (DDGS) drying technology allows additional recycling of water for a further reduction of 50% to only 1.5 gallons of water per gallon of undenatured ethanol produced. Delta-T has a pipeline of new technologies near commercialization that it says should help to position its plants for the coming years as leaders in energy efficiency and low environmental emissions.
Delta-T holds an estimated 25% share in the US and Canadian ethanol markets. Delta-T’s international focus is primarily on emerging fuel ethanol markets in China, India and Australia, and via Delta-T Europe, in Europe and the CIS.
The acquisition accelerates several key areas of Bateman Litwin’s strategy:
It combines the company’s oil and gas EPC and process engineering skills with one of the leading proprietary technologies in bioethanol production.
A typical Delta-T contract size of US$120-250 million plays to Bateman Litwin’s strength.
It provides immediate, sizeable entry into the US ethanol construction market with forecast industry spend on new plants calculated to be worth more than US$10 billion by 2013. Delta-T’s revenue backlog, as of 30 June 2007, amounted to around US$500 million—adding substantially to Bateman Litwin’s existing backlog of around US$1 billion.
In the financial year ended 31 December 2006, Delta-T reported revenues of US$213 million, EBITDA of US$6.1 million and profit before taxation of US$6.4 million under US GAAP. Delta-T has grown significantly with revenues in 2004 of US$8 million and in 2005 of US$25 million.
This acquisition is an exceptional step forward for Bateman Litwin. It supports our strategy by adding a contiguous field of process engineering as well as a new proprietary technology to our product offering. It also provides the Group with a powerful position in the fast growing renewable energy market. Bateman Litwin floated in 2006 with the ambition to grow both organically and through acquisition. This transaction combines both objectives, and positions Bateman Litwin as a leader in the rapidly developing services industry for biofuels.—Shuki Raz, CEO of Bateman Litwin