Oil and gas valve maker Circor International Inc. (NYSE: CIR) has purchased Germany’s Schroedahl International Corp., a privately-owned manufacturer of safety and control valves primarily for the power generation market.
The Burlington, Mass., company said it closed the €76.6 million (US$82.2 million) acquisition on April 15.
The acquisition comes as Circor looks likely to miss management’s first-quarter 2015 earnings, said Walt Liptak, senior analyst, Global Hunter Securities. Forex concerns and a pause in capital spending in both industrial and oil and gas markets are likely worse than expected. The rig count has also continued to weaken in recent months.
“Accretion from the Schroedahl acquisition is likely to help offset weakness from CIR's core energy business,” Liptak said.
Schroedahl should integrate well with Circor, a provider of valves and other highly engineered products for oil and gas, power generation and aerospace and defense markets.
The company also brings in revenue. In 2014, recorded revenue was about $30 million with EBITDA margins over 35%.
Scott Buckhout, Circor president and CEO, said the acquisition positions the company in the high-growth power generation market, particularly in Asia and the Middle East while the deal is consistent with its capital deployment strategy.
“Schroedahl provides sustainable, high margins as a result of its strong engineering capabilities, differentiated technology and excellent reputation for severe service valves,” Buckhout said. “The company has a leading share of the auto-recirculation valve market, which has high barriers to entry. We also will be able to leverage our global sales force to expand Schroedahl’s product sales.”
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