Along the way, Neptune has grown from a small underwater welding business into a mid-size company with a diverse range of subsea and marine inspection, repair and maintenance services.

The most recent moves include the acquisition of North American commercial diving contractor US Underwater Services (USUS), which is based in Dallas, Texas and operates mainly in the Gulf of Mexico and of Tri-Surv, a Perth-based specialist hydrographic surveying company with operations in Western Australia and New Zealand.

Neptune managing director Christian Lange expects the USUS deal to be completed during the first couple of weeks of June and the Tri-Surv acquisition by the beginning of July.

“The US buy, in particular, is an important step for us,” he said.

“The number of platforms, both large and small, along with pipelines and other infrastructure in the Gulf of Mexico is enormous, so it’s an obvious market and a very appropriate place for us to establish our technology.”

Lange is referring to Neptune’s unique underwater dry welding technique that is at the centre of the company’s service offering and expertise.

Invented by Clive Langley, the company’s first managing director, it was developed over a 10-year period in the 1990s to a point where it became a commercial proposition.

Neptune was incorporated in mid-2003 to acquire Langley’s patents and intellectual property rights and then listed on the ASX in 2004.

“The company was established as an underwater welding service business, but it was also set up to continue the research and development work and, in a sense, that R&D is still going on because there are always new frontiers,” Lange said.

“For instance, at the moment there is a pressure limitation where the divers can only operate to around 30m. The technology itself can be used in deeper waters and our next aim is to create a system where divers can work down to 100m of water.”

Lange describes the technique as one of setting up a small dry habitat or chamber immediately around the area to be welded.

“The diver and most of the equipment are external to this chamber, which is just large enough for the welding rod to work effectively.

“We use special coated welding rods that can be taken down to the job in the wet and then poked through a pouch to perform the operation.

“The nearest analogy I can make is the reverse of the pouch surrounding a car’s gear stick, where the gear stick is the welding rod and the diver is outside the pouch looking in through viewing windows.

“The habitat remains dry, is kept at positive pressure and is heated using inert gas.”

Lange says dry welding is far superior to wet welding because the latter produces a brittle, poorer quality job caused by gases (particularly hydrogen from the surrounding seawater) trapped in the weld itself.

There is another underwater dry weld technique called a hyperbaric system where temporary chambers large enough to include the diver and his equipment are built around the job and the work is completed as if it were on dry land.

But Lange says this is very costly and time-consuming compared to Neptune’s system.

The company’s sudden spurt of growth from its initial business of supplying welding services to the naval and marine industries dates more or less from Lange’s appointment as managing director in February 2006.

Born in Trinidad, he migrated to Australia with his family in 1973 at the age of six and was educated in Perth.

A petroleum engineer, he spent 17 years with international well services group Schlumberger, rising through the ranks to become a vice-president based in New York before returning to Perth to join Neptune.

Neptune’s management agreed that while naval and marine work was a good niche to retain, the offshore oil and gas industry also offered plenty of scope for expansion and diversity.

“We formed a strategy that called for accelerated growth to quickly attain a critical mass as well as broaden the focus and establish an expanded geographic footprint,” Lange said.

“The way we have done that is to target private companies with specific areas of expertise, make the takeover moves and, above all, retain the employees in the final mix.

“The idea has always been to keep the managers of the merged or takeover target and we aim to continue building our business via friendly overtures.

“This approach has worked well and given us the opportunity to acquire some of the best people in their fields.”

In fact, Neptune is not interested in proceeding if a takeover target opposes the deal because it wants the personnel as well as the client base.

Once the USUS and Tri-Surv acquisitions have gone through, Neptune will have reached a staff level of close to 300.

Total outlay for these two companies is $53 million, which will be part funded by a $30 million institutional share placement.

In the Tri-Surv deal, Neptune has signed a letter of intent proposing payment of $16.7 million upfront (comprising 70% cash and 30% Neptune shares) plus a three-year earn-out based on Tri-Surv’s pre-tax earnings performance.

In the USUS case, the purchase price is approximately $26 million, including $7 million of assumed debt – a multiple of 5.5 times estimated 2007 pre-tax earnings, depreciation and amortisation.

Lange says Neptune plans to keep the USUS office in Dallas as the Gulf of Mexico hub of operations.

The four earlier takeovers – Subsea Developments, Link Weld, Allied Diving Services and Territory Diving Services – have all been Australian companies.

Now Neptune plans to expand further on the international front.

“We have a business development consultant in Europe on the lookout for companies that could give us an inroad into areas like the North Sea,” Lange said.

He is well aware of the competition in the offshore service market worldwide, but says Neptune has no intention of going head-to-head with major service companies such as Brown & Roots and Kelloggs.

Rather he sees Neptune’s role as supporting these majors.

“Our idea is to occupy the middle space in the offshore services sector that has traditionally been dominated by the private companies and not really favoured by the majors because there is little incentive for them in this area,” he said.

“So far there has been a favourable reaction from the people in companies we have acquired as well as from their clients. Our plan is make the future more of the same.”