Weir Acquires Novatech LLC

Posted on: 25 January 2012

The Weir Group PLC has agreed to acquire Novatech LLC, a US manufacturer of well service pump valves and valve seats for upstream oil and gas applications, for US$176m (£113m1) in cash.

 

The consideration will be funded from existing bank facilities.  The acquisition is in line with Weir's acquisition criteria and is expected to be immediately earnings accretive with post tax returns expected to exceed Weir's cost of capital within the first full year of ownership. Subject to US regulatory approvals, completion of the acquisition is expected in February 2012.

 

Commenting on the acquisition, Weir Chief Executive, Keith Cochrane, said: "Novatech is a respected brand in the US upstream oil and gas markets, with strong market share in the frac consumables market. This deal enables Weir to broaden our aftermarket expendable product portfolio in this fast-growing sector, where increasing operating intensities require equipment and components to be more regularly replaced and serviced. With the recent acquisition of Seaboard, this strengthens further Weir's presence in the North American unconventional oil and gas markets and builds a larger upstream product range to offer the developing international shale markets."

 

President, Chairman and CEO of Novatech, Starr L. Pitzer Jr, said: "We have worked with Weir's upstream business as a supplier for a number of years and have come to know the company well and admire the way they operate. Through joining the Group, I believe that Weir's global sales and service networks will enable the business to grow, not only in North America, but also by taking Novatech products to international customers."

Readers Comments