18% Annualized Return With Dresser-Rand
Chris DeMuth Jr. • 18 Comments
Chris DeMuth Jr. • 18 Comments
Dresser-Rand Caught In A Move Toward More Capital Discipline
Stephen Simpson, CFA
Stephen Simpson, CFA
Dresser-Rand Is Still No Bargain
Dresser-Rand Is Still No Bargain
Jun. 29, 2015, 6:57 AM
- Siemens (OTCPK:SIEGY) has secured unconditional EU regulatory approval for its proposed $7.6B bid for Dresser-Rand (NYSE:DRC).
- "After a detailed assessment of the markets involved, the Commission is satisfied that European consumers will not be negatively affected by the merger," European Competition Commissioner Margrethe Vestager said in a statement.
- Siemens is looking to the deal to expand its presence in the United States and the shale exploration boom.
Mar. 25, 2015, 2:10 PM
- European Union antitrust regulators have suspended their investigation into Siemens' (OTCPK:SIEGY -0.6%) $7.6B bid for Dresser-Rand (DRC -0.1%) while waiting for "important information" from the German company.
- Siemens says the deal is still on schedule and expects to close in the summer of 2015 or earlier, but says it cannot comment further on the EU's request.
- EU regulators have expressed concerns that the merged company would reduce competition in turbo compressors and drivers for trains.
Mar. 11, 2015, 7:46 AM
- EU antitrust regulators have extended their investigation into Siemens' (OTCPK:SIEGY) $7.6B proposed takeover of Dresser-Rand (NYSE:DRC), Reuters reports.
- The European Commission will now decide by July 14 instead of June 30 whether to clear the deal.
- Previously: European Commission to probe Siemens' proposed deal for Dresser-Rand (Feb. 13 2015)
Feb. 13, 2015, 11:42 AM
- The European Commission says it has opened an investigation to assess whether Siemens' (OTCPK:SIEGY +1.5%) proposed $7.6B acquisition of Dresser-Rand (DRC +0.1%) is in line with EU antitrust regulations.
- Siemens is seeking to reinforce its presence in the U.S. shale oil and gas industry through the deal; both companies supply turbo compressors as well as the engines which drive the compressors.
- The EC now has 90 working days, until June 19, to complete its probe.
Dec. 9, 2014, 4:43 AM
- Despite a decline in oil prices, Siemens (OTCPK:SIEGY) Chief Executive Joe Kaeser announces he would "not even think about walking away" from September's $7.6B Dresser-Rand (NYSE:DRC) deal.
- Siemens also see higher synergies from the Dresser-Rand purchase, and is now targeting 30% more savings from the acquisition. The group previously said it expected more than €150M in annual synergies by 2019.
- Previously: Siemens agrees to buy Dresser-Rand for $7.6B (Sep. 22 2014)
Sep. 22, 2014, 7:25 PM
- Siemens (OTCPK:SIEGY) lost out to GE for Alstom's gas turbine business earlier this year but has now acquired Dresser-Rand (NYSE:DRC), a major supplier of equipment such as compressors and gas turbines used to exploit shale resources.
- But Siemens is paying up for the privilege, writes Heard On The Street's Thao Hua, at more than 14x the consensus estimate for Dresser's 2015 EBITDA - higher than previous deals in the sector and far higher than Siemens' own multiple of ~9x.
- The rate of growth in the gas turbine sector is falling, estimated to hit a trough in 2015 by Siemens' own metrics; the company expects the market will heat up again at an assumed annual growth rate of 6%-8%, but that remains to be seen.
- In terms of synergies, Siemens' scale and wide reach present opportunities to raise DRC's margins and revenue growth, but expectations of €150M ($192M) of annual synergies isn't expected to be reached until 2019.
Sep. 22, 2014, 1:57 AM
- After much speculation, Siemens (OTCPK:SIEGY) has announced that it would buy Dresser-Rand (NYSE:DRC) for $7.6B, and says that its $83/share bid was unanimously supported by Dresser-Rand's board of directors.
- Siemens also announced the sale of its 50% stake of household goods joint venture BSH to partner Robert Bosch for €3B ($3.9B).
- Siemens expects to close the Dresser-Rand deal by summer 2015, while it aims to complete the sale of its BSH stake in the first half of 2015.
- Previously: Siemens close to acquiring Dresser-Rand for $6B
Sep. 21, 2014, 2:48 PM
- Siemens (OTCPK:SIEGY) is reportedly on the verge of a $6B all-cash deal to acquire U.S. oilfield equipment maker Dresser-Rand Group (NYSE:DRC).
- Siemens is expected to pay low- to mid-$80s per share. DRC closed Friday at $79.91, and is +18% since Wednesday over takeover speculation.
- Sources say the all-cash bid has trumped a competing offer from Sulzer AG (OTC:SULZF), which was looking to merge with Dresser-Rand in an all-stock deal.
- Discussions are continuing and could still fall apart.
Sep. 19, 2014, 5:21 PM
- The latest speculation over Dresser-Rand (NYSE:DRC) now includes GE, which Financial Times reports is holding talks with DRC management about a possible takeover and is deciding whether to launch a bid.
- If it does, it could be the second time GE has faced off against Siemens (OTCPK:SIEGY) over a multibillion-dollar deal in the past six months after competing over the takeover of the energy businesses of Alstom in June.
- Siemens reportedly is in talks with DRC about a ~$80/share offer, and Swiss industrial pump maker Sulzer (OTC:SULZF) has said it is in talks with the U.S. oilfield equipment manufacturer about a possible merger.
Sep. 19, 2014, 12:26 PM
- Renova, a holding company of Russian oligarch Victor Vekselberg, says it has bought a 4.99% stake in Dresser-Rand (DRC +10.2%), adding a twist to recent speculation on DRC's future.
- Renova also holds a 33.19% stake in Swiss pump maker Sulzer (OTC:SULZF), which said earlier this week it was in talks with the U.S. company about a potential deal.
- A new report says Siemens (OTCPK:SIEGY) is preparing a $6B-plus offer for DRC.
- Meanwhile, DRC is downgraded to Sell at Gabelli, which says shares have run up too far on the M&A talk; also, a potential antitrust review, while likely not an obstacle, could mean a deal close would be 6-9 months out.
Sep. 19, 2014, 6:50 AM
- Siemens (OTCPK:SIEGY) is planning to offer more than $6.1B, or $80/share, for Dresser-Rand (NYSE:DRC), Reuters reports quoting Germany's Manager Magazin.
- Siemens' move could trigger a bidding war with Sulzer (OTC:SULZF), which announced on Wednesday that it is in advanced talks for a merger with the compressor and turbine maker.
- DRC +4.1% premarket
Sep. 18, 2014, 9:12 AM
- Dresser-Rand (NYSE:DRC) +1.5% premarket after William Blair says the company could be valued at $80-$100/share in an M&A deal with limited downside.
- Blair cites an increasing likelihood of a merger transaction after Sulzer confirmed yesterday that it is in talks to acquire DRC; the firm keeps its Outperform rating on the stock while raising its price target to $82 from $70.
- Meanwhile, Gabelli continues to believe DRC has an asking price somewhere above $80 to be acquired by Siemens (OTCPK:SIEGY).
Sep. 17, 2014, 12:10 PM
- Dresser-Rand (DRC +8.6%) spikes after Swiss pump maker Sulzer (OTC:SULZF) says it is in advanced discussions about a merger with the U.S. oilfield equipment maker.
- Sulzer's statement followed a report by a Swiss newspaper which said the two companies could announce a merger as soon as next month.
- A report last month said DRC was working with Morgan Stanley to prepare for possible takeover bids.
Jul. 17, 2014, 3:58 PM
- Dresser-Rand (DRC +12.5%) maintains strong gains following a report overnight that Siemens (OTCPK:SIEGY -1.9%) is preparing an offer to buy out the oilfield equipment maker and has opened up talks following its unsuccessful bid to buy Alstom’s energy assets earlier this year.
- Siemens has “huge” firepower to pursue deals toward expanding its energy assets, CEO Joe Kaeser had said after coming up short on Alstom.
- “Strategically it would be a good fit, it would fill some gaps in the portfolio and improve Siemens's position in North America,” Commerzbank analysts say.
- Shares have held up despite some notes of caution throughout the day; DRC s not viewed as a “motivated” seller now, a J.P. Morgan analyst says, and Raymond James believes a takeover is unlikely.
Jul. 17, 2014, 7:08 AM
- Siemens (OTCPK:SIEGY) is looking to acquire Dresser-Rand (NYSE:DRC), German Manager Magazin reported this morning.
- The report also states that Siemens has prompted Lazard to form the offer to extend to the turbine maker, and would consider a hostile takeover if necessary.
- Dresser-Rand has a current market value of $4.6B.
Sep. 6, 2013, 4:58 PM
- GE's growing interest in oil and gas assets and a decade-high $19.3B cash stockpile are turning Dresser-Rand (DRC) and Dril-Quip (DRQ) into potential takeover targets, analysts say.
- DRQ is projected to boost sales by 63% in the next three years, faster than all but two similar-sized U.S. peers, and analysts see DRC expanding 51%, according to data compiled by Bloomberg.
- DRQ, with visible multi-year growth in front of it, "is always at the top of the list of companies that are talked about as a consolidation target,” a Lazard Capital analyst says, but a deal with GE might be viewed by regulators as anti-competitive.
Dresser-Rand Group Inc is a supplier of custom-engineered rotating equipment solutions for long-life, critical applications in the oil, gas, chemical, petrochemical, process, power generation, military and other industries in various countries.
Sector: Industrial Goods
Industry: Diversified Machinery
Country: United States
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