Hunting PLC (LSE: HTG) acquires Flexible Engineered Solutions to expand subsea and offshore wind business

Hunting PLC (LSE: HTG), the British precision engineering group, has completed the acquisition of Flexible Engineered Solutions (Group) Holdings Limited (FES), a UK-based specialist in subsea fluid transfer systems for the offshore oil, gas, and renewable energy sectors. The £50 million all-cash transaction, executed on a cash-free and debt-free basis, marks a major milestone in Hunting PLC’s “Hunting 2030 Strategy” to expand its presence in high-margin, mission-critical offshore infrastructure segments.

The acquisition brings proprietary technologies used in subsea distribution systems (SDSs) and Floating Production Storage and Offloading (FPSO) vessels into Hunting PLC’s portfolio, enhancing its capabilities in both deepwater oil and floating wind markets. FES will be integrated into Hunting PLC’s Subsea Technologies division under the leadership of Dane Tipton, with the acquired company’s senior management agreeing to remain in place for at least twelve months to ensure operational continuity.

What are the key financial metrics and valuation drivers behind Hunting PLC’s £50 million acquisition of FES?

Flexible Engineered Solutions is headquartered in Ashington, Northumberland, where it operates from a 35,000 sq ft manufacturing facility and a 6,000 sq ft testing center. The company employs 46 staff and has built a global client base, with deployments across the Gulf of Mexico, West Africa, and South America.

For the financial year ending December 31, 2024, FES reported revenue of £31.3 million and EBITDA of £6.2 million under UK GAAP. On an adjusted basis—including IFRS 16 lease accounting and other management adjustments—EBITDA reached £6.7 million. The acquisition values FES at a multiple of approximately 8x adjusted EBITDA, aligning with precedent bolt-on deals in the precision engineering and offshore services sector.

At the time of acquisition, FES held a confirmed order book of approximately £11.8 million and an active tender pipeline exceeding £100 million, offering strong forward visibility on cash flow and revenue conversion.

Hunting PLC funded the transaction entirely through internal cash resources and retains post-deal liquidity of approximately $40 million. This disciplined use of capital supports its stated objective of enhancing engineered product exposure without over-leveraging the balance sheet.

How does the FES deal support Hunting PLC’s broader push into subsea technologies and renewable energy?

The acquisition of FES deepens Hunting PLC’s footprint in subsea and deepwater infrastructure—core pillars of the company’s strategy outlined at its September 2023 Capital Markets Day. FES brings an array of engineered systems to Hunting’s existing offerings, including Diverless Bend Stiffener Connectors (DBSC), turret systems, fluid transfer swivels, hydraulic and fiber stab plates, subsea control panels, pig launchers, and seawater intake systems.

These systems are used in long-cycle, technically demanding offshore projects and are increasingly relevant in the energy transition, particularly in floating offshore wind developments. FES has begun adapting its DBSC solution for turnkey dynamic cable connections in renewable projects, positioning Hunting PLC to diversify further into green subsea infrastructure.

Institutional investors have responded positively to the strategic rationale, highlighting the complementarity of FES’s technologies, customer base, and geographic focus. The blue-chip roster of clients—ranging from international oil majors to global energy service providers—mirrors Hunting PLC’s existing commercial footprint in Brazil, Southeast Asia, the United States, and West Africa.

With its engineered product orientation, FES is expected to enhance margin resilience and earnings predictability across economic cycles, particularly as demand for subsea tiebacks, FPSOs, and floating offshore wind solutions continues to grow.

What operational synergies and execution risks could shape the integration of FES within Hunting PLC?

Operationally, FES will report into Hunting PLC’s Subsea Technologies segment, led by managing director Dane Tipton. The integration process is expected to focus on leveraging Hunting’s global scale to expand FES’s international reach, cross-sell its engineered products, and align manufacturing standards with the group’s precision quality benchmarks.

The sellers, who comprise FES’s senior management, have committed to remain with the business for a minimum of twelve months post-acquisition, offering near-term stability in leadership and customer relationships.

Institutional analysts have noted that the cross-selling opportunity, particularly across Hunting’s Brazilian and U.S. offshore client base, could unlock value within the first year of ownership. However, they also flagged that successful margin capture will depend on synchronizing pricing models, engineering processes, and delivery schedules across multiple regional markets—especially in competitive and capex-sensitive environments like Southeast Asia and West Africa.

In particular, scaling DBSCs and turnkey cable systems for offshore wind markets will require close coordination with tier-one developers and EPC partners, many of whom have bespoke technical specifications and compliance requirements.

What are Hunting PLC’s capital allocation priorities following the FES transaction?

With approximately $40 million in post-deal cash and bank reserves, Hunting PLC remains in a strong liquidity position. The company has confirmed that it is reviewing its capital allocation policy and intends to announce updated priorities in its next trading update, scheduled for July 9, 2025.

Market expectations suggest that dividend increases are unlikely in the near term. Instead, institutional investors anticipate that capital will be allocated toward integration capex, potential follow-on bolt-on acquisitions, and further investments in subsea R&D capabilities.

Given the strong cash generation profile of both Hunting and FES, analysts also expect that net leverage will remain low, leaving room for opportunistic capital deployment aligned with the 2030 strategy.

In the near term, Hunting PLC is expected to focus on fully integrating FES, converting the existing bid pipeline into orders, and using its enhanced subsea portfolio to pursue larger bundled contracts with offshore and renewables operators.

How does the acquisition reflect Hunting PLC’s evolving identity as a precision engineering leader for the energy transition?

The FES acquisition reflects a broader pivot by Hunting PLC toward precision-engineered, IP-rich products that serve mission-critical roles in offshore energy infrastructure. With engineered systems now accounting for a growing share of revenue and margin, Hunting PLC is signaling to the market that it intends to become a go-to partner for deepwater, subsea, and floating renewables clients.

This diversification effort comes as traditional oilfield services face increasing commoditization and margin pressure. By contrast, the demand for bespoke subsea hardware and turnkey fluid-handling systems remains strong—particularly for operators seeking long-term reliability in harsh environments.

As floating wind deployments scale across Europe, Asia, and the Americas, Hunting PLC’s ability to offer dynamic cable interface systems, fluid swivels, and FPSO-related equipment will position it competitively within next-generation energy infrastructure.

Looking ahead, institutional sentiment suggests Hunting PLC may continue to explore inorganic growth through additional bolt-ons in the subsea domain—particularly in software-enabled asset monitoring, composite materials, or hybrid subsea-electrical solutions.

With its balance sheet intact, EBITDA visibility improved, and energy transition alignment more evident, the FES deal marks a clear step toward Hunting’s long-term reinvention as a global offshore engineering innovator.