China's Zhuzhou China South Rail Times Electric completed a £130 million acquisition of the UK-based ROV and trenching equipment manufacturer Specialist Machine Developments (SMD), also known as Soil Machine Dynamics.
Zhuzhou specializes in mass transit electric drive converter and control systems. The firm, which has bought Newcastle-based SMD from private equity firm Inflexion, is a subsidiary of Chinese state-owned CSR Corporation of China, which produces electric locomotives. It says SMD's Newcastle base will become its global headquarters for deepwater equipment, with plans for a Chinese subsidiary of SMD to be set up for the Chinese maritime market.
China's deepwater offshore is a growing area. Only yesterday, Technip and COOEC were awarded a contract by CNOOC for the design of China's first tension leg platforms, to be installed on the Luihua field in the South China Sea.
Liu Hualong, the president of CSR commented: “SMD is a global leader in its sector that brings with it deep expertise and a strong reputation for quality products. We are excited about working alongside the company to grow its operations and further unlock opportunities in the global market.”
Following the acquisition, SMD will remain independent in its business operations and the day-to-day functions will still be controlled by its original management team. A new board of directors will be set up to take charge of business strategy, investment decision-making, financial monitoring and important decisions related to government and public relations.
SMD will serve as the global headquarters for CSR Times Electric’s deepwater equipment division. At the same time, a Chinese subsidiary of SMD will be set up to develop its presence in the Chinese maritime market. In this subsidiary, SMD will be responsible for overall technology planning, market management and other daily operations.
Ding Rongjun, the president of CSR Times Electric, commented: “The acquisition of SMD is an important step in the company’s overall growth strategy to internationalize our operations. We are looking to expand beyond the Chinese railway transportation industry into new product lines with higher technical added value and SMD represented a fantastic opportunity to develop our presence in the ocean engineering equipment industry. By opening an SMD subsidiary in China, we want to establish the company as a leading supplier of remote operated vehicles (ROVs) equipment in the national market.”
Andrew Hodgson, CEO of SMD commented: “I am proud of the business SMD is today. Inflexion has been an active and supportive investor with whose help we have diversified our customer base and the markets which we serve. With the technology, market and financial resources CSR brings we believe SMD will continue its strong development.”
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