01.07.2011

HMS Group acquires Sibneftemash

Moscow, Russia – July 1, 2011 – HMS Group (LSE: HMSG), the leading pump manufacturer and provider of flow control solutions and related services in Russia and the CIS, today announced that it has completed the acquisition of 98.59% of the share capital of Sibneftemash, an oilfield equipment manufacturer, for a total cash consideration of RUB 1.29 billion. Deal is fully financed with available credit facility.

Transaction Rationale

  • Integration of HMS Neftemash1 and Sibneftemash creates a major oilfield equipment manufacturer and provider of related services
  • Synergies in sales of oil and gas modular equipment (HMS Neftemash) and oilfield services and process equipment (Sibneftemash) strengthen the market position and diversify HMS Group product offering to oil companies and oilfield services providers
  • Unified sourcing enables budget savings for the procurement of materials and supplies

Sibneftemash, located in the Tyumen Region of the Russian Federation, designs, manufactures and supplies a diverse range of equipment and appliances used in the drilling, production of oil and gas and well servicing, including tank storage, cementing, well intervention and hydraulic fracturing equipment. The company benefits from a strong client base comprising of leading Russian and international oil producers and providers of oilfield services including Surgutneftegaz, Halliburton, Integra, Gazprom Neft, TNK-BP and Rosneft.

Artem Molchanov, Managing Director (CEO) of HMS Group, commented:

“We look forward to new growth opportunities in the booming market of oilfield development. As a result of this deal HMS Group further improves its ability to offer comprehensive solutions to its clients. We believe that this acquisition improves the potential to significantly increase our revenues from the oilfield equipment market in the future.”

***

The HMS Group is the leading pump manufacturer and provider of flow control solutions and related services to the oil and gas, nuclear and thermal power generation and water utilities sectors in Russia and the CIS. The HMS Group’s products are mission-critical elements of projects across a diverse range of industries. It has participated in a number of large-scale infrastructure projects in Russia, including providing pumps and modular equipment to the Vankor oil field and pumping stations on recent trunk pipelines projects linking Russia’s core oil producing areas to export ports on the Pacific Ocean and Baltic Sea. The Group reported revenues of RUB 7.1 billion, adjusted EBITDA of RUB 1.6 billion and profit for the period of RUB 1 billion for the three months ended March 31, 2011. The HMS Group’s global depositary receipts (“GDRs”) are listed under the symbol “HMSG” on the London Stock Exchange.


For further information, please contact:
Inna Kelekhsaeva
IR Officer
Tel: +7 (495) 730-66-01, ext. 1318
kelekhsaeva@hms.ru

 


Nozima Karimova
Head of Press Service
Tel: +7 (495) 730-66-10
karimova@hms.ru

DISCLAIMER

THIS COMMUNICATION DOES NOT CONSTITUTE AN OFFER OF, OR THE SOLICITATION OF AN OFFER TO BUY OR SUBSCRIBE FOR, GDRs OR OTHER SECURITIES TO ANY PERSON IN ANY JURISDICTION TO WHOM OR IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL AND, IN PARTICULAR, IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN OR THE RUSSIAN FEDERATION.

THIS ANNOUNCEMENT IS NOT AN OFFER FOR SALE OF ANY SECURITIES IN THE UNITED STATES. SECURITIES MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES ABSENT REGISTRATION OR AN EXEMPTION FROM REGISTRATION UNDER THE US SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). THE HMS GROUP HAS NOT REGISTERED AND DOES NOT INTEND TO REGISTER ANY PORTION OF ANY OFFERING IN THE UNITED STATES OR TO CONDUCT A PUBLIC OFFERING OF ANY SECURITIES IN THE UNITED STATES.

THIS COMMUNICATION IS ONLY BEING DISTRIBUTED TO AND IS DIRECTED ONLY AT (I) PERSONS WHO ARE OUTSIDE THE UNITED KINGDOM OR (II) INVESTMENT PROFESSIONALS FALLING WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 (THE “ORDER”) AND (III) HIGH NET WORTH ENTITIES, AND OTHER PERSONS TO WHOM IT MAY LAWFULLY BE COMMUNICATED, FALLING WITHIN ARTICLE 49(2) OF THE ORDER (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS “RELEVANT PERSONS”). THE SECURITIES REFERRED TO IN THIS ANNOUNCEMENT ARE ONLY AVAILABLE TO, AND ANY INVITATION, OFFER OR AGREEMENT TO SUBSCRIBE, PURCHASE OR OTHERWISE ACQUIRE SUCH SECURITIES WILL BE ENGAGED IN ONLY WITH, RELEVANT PERSONS. ANY PERSON WHO IS NOT A RELEVANT PERSON SHOULD NOT ACT OR RELY ON THIS DOCUMENT OR ANY OF ITS CONTENTS.

1 HMS Group owns 100% of OJSC HMS Neftemash – one of the leading manufacturers of modular oilfield equipment located in Tyumen.