New Competition Not Enough to Derail FMC Technologies, Inc. (FTI)

Despite all of this, FMC Technologies acquired Pure Energy Services, in an apparent contrarian move. You see, Pure Energy’s business is solely focused on the North American land market, and with so many signs pointing to an eventual recovery here, this move looks to be a promising one. Through the first six months of a troubling 2012 for the North American market, Pure earned C$7.9 million, which was nearly double that of 1H 2011.

As I mentioned, net interest expense did bump up because of its October acquisition, from $2.2 million in the fourth quarter of 2011 to $10.7 million in the most recent quarter. Fret not, though, because the investment appears to be well worth it thus far. According to Bob Potter, FMC Technologies’ president, synergies are already being established in multiple areas of operation. He is also hopeful that it will be able to leverage Pure’s strengths in markets outside its wheelhouse, which just so happens to include the prolific Bakken formation.

Foolish thoughts on the Future
What this report shows is that the strengths Fool CEO David Gardner saw in the stock when he recommended it are continuing to grow. The Pure Energy Services acquisition further supplements an already strong business model, especially given the geographies in which Pure has built its core competencies. Technology and experience developed in the Bakken and the Canadian geographies are likely to be leveraged in both moving forward, along with other similar plays that have yet to be tapped. Couple this with FMC Technologies’ bread-and-butter Subsea Technology segment, and a global energy equipment and services powerhouse could emerge over the next few years. Keep an eye on this growth story before it’s too late.

The article New Competition Not Enough to Derail FMC Technologies originally appeared on Fool.com and is written by Taylor Muckerman.

Taylor Muckerman has no position in any stocks mentioned. The Motley Fool recommends FMC Technologies.

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