CHICAGO Worthington Industries Inc.s Pressure Cylinders business is set to acquire a 75-percent stake in Arıtaş Basınçlı Kaplar Sanayi AŞ (Aritas), an Istanbul-based company that builds liquefied natural gas (LNG) tanks, cryogenic vessels and systems.
The deal is contingent on Turkish government approval, which is expected later this month, Columbus, Ohio-based Worthington said.
Aritas LNG products account for a majority of its sales, which totaled $40 million last year. For nearly a decade, it has been building and servicing the virtual LNG pipeline in Turkey via LNG transport trailers, LNG ISO containers, LNG bulk tanks and LNG satellite stations for regasification.
Aritas also is involved in LNG fueling systems, including those for natural gas-powered ships. Its product portfolio ranges from tanks holding up to 132,000 gallons and bulk tanks to transport trailers and micro-bulk storage.
"We believe Aritas will dramatically increase our ability to grow our LNG and cryogenics businesses quickly and globally," Worthington chairman and chief executive officer John McConnell said in a statement.
"Aritas experience and LNG product lineup fit our strategy to expand our footprint in energy products, as well as products for alternative fuels to power vehicles," Pressure Cylinders president Andrew Billman said. "Aritas technology is easily adaptable to markets it is currently not servicing, including the Americas and Western Europe. Thoughtful integration with our global sales force will help us drive strong commercial synergies."
Aritas operates a 270,000-square-foot plant in Istanbul employing 300 people and plans to build a second facility 125 miles away in the port city of Bandirma, Turkey, which ultimately will double or triple its existing capacity, according to Worthington.
"The fragmented and regional nature of global LNG/cryogenic distribution and storage presents an opportunity for (Worthington) to be a future global consolidator," said Philip Gibbs, equities analyst at Cleveland-based KeyBanc Capital Markets Inc. "Over the long term, the venture could be much more accretive (to earnings) as growth initiatives bear fruit."