Energy sector software and services supplier KBC Advanced Technologies has high expectations of Infochem, the London-based supplier of software around the chemistry of oil and gas fluids that it has just bought for £9.5m.
Infochem will take KBC into the upstream energy industry for the first time, opening up a new area of business. It is also tasked with helping KBC expand the proportion of its software sales, a line of business that has seen choppy performance within KBC (see KBC: consulting up, license sales down).
That is a lot to ask of a company who reported revenue of £1.2m and before tax profits of £0.6m for the year ending July 31 2011 and had £1.3m in cash at the time of the acquisition. However, Infochem has a presence in the flow assurance market in oil and gas development and production, a sector that has been buoyant in recent years. Its 2012 financials are expected to show “a substantial increase over the prior year figures”, including profit before tax for the first nine months than higher the previous year. KBC, who reported revenue of £55.7m for the year to December 31 2011, says the acquisition will be earning enhancing during 2012. The energy industry as a whole remains buoyant, Aveva for example who does solid business in the oil and gas areas, had a strong end to its financial year (see Aveva ends with a flourish). Overall, Infochem looks like a neat but strategic acquisition for KBC.