LNG

Chart Industries Inc., the US maker of LNG and industrial gases equipment whose most recent orders were for major US LNG export plants on the Gulf Coast, has completed the acquisition of a Swedish company CSC Cryogenic Service Center AB to increase fuel and service offerings in the European Union.

Chart Industries, the US LNG equipment-maker and industrial gases company, has acquired another US company, Cryogenic Gas Technologies Inc., in its latest products expansion move.

Chart said it paid $55 million in cash for Cryo Technologies, which will retain its operational base in Allentown, Pennsylvania.

The acquisition was described by Chart as a global leader in custom engineered process systems to separate, purify, refrigerate, liquefy and distribute high value industrial gases such as hydrogen, helium, argon and hydrocarbons with design capabilities for cold boxes for hydrogen and helium use.

The distribution systems Cryo Technologies supplies are located within the helium and hydrogen liquefaction facilities and are inclusive of trailer loading systems, which facilitates the first step in product distribution.

Chart confirmed that company founder and President Rick Hessinger, along with the entire Cryo Technologies team, will stay with Chart and continue to be located in their offices in Allentown.

“We could not be more excited to welcome Rick and the Cryo Technologies team into the Chart family,” stated Jill Evanko, Chart’s Chief Executive and President.

“Their world class, differentiated cryogenic engineering expertise, global project experience in hydrogen and helium liquefaction coupled with our process technologies, brazed aluminum heat exchanger and cold box manufacturing capabilities creates the only multi-molecule full-solution liquefaction and equipment offering in the world,” Evanko explained.

“Couple the above complementary nature of the business with the fact that our companies have worked together for 20 years, and immediate and significant synergies exist,” stated the Chart CEO.

Both Chart, based in Atlanta, Georgia, and Cryo Technologies have very active commercial order pipelines with multiple requests for hydrogen liquefaction and processing.

In recent years, Chart acquired Harsco Corp.’s Air-X-Changers business, boosting its offering of air-cooled heat exchangers and industrial fans.

Other Chart takeovers have included German company VCT Vogel, a servicer of cryogenic and mobile gas tank equipment and trucks and a European leader in truck-mounted drive and control systems, and the small US and Italian companies,, Hudson Products and VRV SpA.

“The combination of Chart and Cryo Technologies offers the market a unique one-stop shop for customers who want to liquefy and market the hydrogen molecule, regardless of plant capacity, but need an experienced and reliable equipment and process supplier for liquefaction and storage,” stated Chart.

Additionally, Cryo Technologies has expertise in helium liquefaction and this will open up that sector for Chart as large helium liquefaction projects also requiring storage, ISO containers and transport.

Chart, which is expected to publish its earnings on February 18, said the acquired company is expected to contribute approximately $30M of revenue in Chart’s 2021 outlook.

US LNG equipment-maker Chart Industries completes acquisition of the Microbulk cryogenic tank intellectual property, equipment, and other assets from privately-held IC Biomedical.

Chart Industries, the US LNG and industrial gases equipment provider, has completed its takeover of Harsco Corp.’s Air-X-Changers business, boosting its offering of air-cooled heat exchangers and industrial fans.

Chart Industries, the US LNG and industrial gases equipment provider, has priced its underwritten public offering of 3.5 million shares at $73.50 per share to fund a portion of the purchase price of its pending acquisition of Harsco Corp.’s Industrial Air-X-Changers business.

Chart has also granted the underwriters a 30-day option to purchase up to an additional 525,000 shares.

The company estimates that the net proceeds of the offering will be around $248.8 million, or $286.3M if the option to purchase additional shares by the underwriters is exercised in full, after deducting underwriters discounts and commissions and transaction expenses.

Chart’s shares were last trading on June 12 at $74.55 on the Nasdaq global stock exchange, valuing the company at $2.37 billion.

J.P. Morgan Securities, Credit Suisse Securities (USA) and Morgan Stanley & Co. acted as joint lead book-running managers for the offering and Evercore Group and Wells Fargo Securities will act as book-running managers.

Chart’s previously arranged financing consists of a revolving credit facility and a new term loan, both of which were over-subscribed by banks keen to lend.

The share offering was closing on June 14, concurrent with the finalization of the commitment from banks for $1.1 billion in credit facilities.

Chart said the acquisition of Harsco’s Air-X-Changers business was now expected to close on July 1.

“While our proposed offering of common stock was significantly over-subscribed, the associated pricing was at the lower end of our anticipated range,” said Chart Chief Executive Jill Evanko.

“We decided to size the offering to a level that would meet the needs of the business and support our growth and profitability objectives, while also acting in the interest of current shareholders by reducing anticipated dilution,” the CEO explained.

Chart, based in the outskirts of Atlanta, Georgia, agreed in May 2019 to take over Harsco in its fourth acquisition in two years as it continues to receive LNG orders for key equipment.

The Harsco AXC business specializes in gas compression coolers.

The company reiterated its full year 2019 sales forecast of between $1.41 billion and $1.46Bln.

The guidance assumes LNG project revenue in 2019 from the Venture Global Calcasieu Pass and “Golar Gimi” LNG production hull projects of $28M to $30m, subject to project timing.

Harsco AXC is projected to generate net sales of around $260M in 2019, and a 23 percent gross earnings margin as a percentage of sales.

The Chart acquisition is the fourth in the past two years after other takeovers in the US and Europe.

Chart first expanded its business in 2017 by acquiring German company VCT Vogel, a servicer of cryogenic and mobile gas tank equipment and trucks and a European leader in truck-mounted drive and control systems.

The takeover of the German company followed its $410M cash purchase of smaller US sector rival Hudson Products for its range of air-cooled heat exchangers and axial flow cooling fans for the refining, petrochemical and natural gas markets.

Then in September 2018, Chart agreed to acquire Italian company VRV S.p.a., an engineer and designer of cryogenic equipment whose offerings also complement Chart’s products.

The Harsco group has said that the proceeds from selling its Harsco AXC gas compression subsidiary would be used to pay debts and provide the parent company with additional financial flexibility to its transformation into an environmental solutions operator.