General Electric said Monday it will expand its oil services businesses with the purchase of U.K. oil-drilling inspection group Sondex plc for £288.7M ($583 million), or 460 pence per share. The price is 36% above Sondex's closing price on August 30 before the company said it was in "advanced talks" to be bought out. Sondex shares rose 7% to 453 pence on the news Monday. Based in Hampshire, Sondex specializes in the design, manufacture and sale of electro-mechanical downhole tools and surface equipment to oilfield service companies that run well-site operations on behalf of oil and gas production companies. It had revenue of £68.5M in the year ended February 28. "Sondex will be an important addition to GE Energy's portfolio of businesses, complementing our existing Tensor product line," said Brian Palmer, VP of GE Energy's Optimization and Control business. "We expect the combination to form a substantial growth business for GE going forward." The move is the Optimization business's first venture outside the U.S. Sondex Finance Director Chris Wilks and CEO Martin Perry plan to stay with the company and Wilks told Reuters the company would look to expand its presence in China given GE's resources there. GE, which will get a £2.9M break-up fee if the deal falls through, was advised by Credit Suisse. Investec advised Sondex, which also received another approach and sounded out other buyers before agreeing to the GE deal. Sondex's largest customer is Halliburton, with about 7% of its turnover. Other customers include Schlumberger and Baker Hughes.
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