Weir Buys Mathena
Purchase of an Oklahoma-based manufacturer of pressure control rental equipment.
The Weir Group Plc plans to buy Mathena Inc, a provider of pressure control rental equipment for onshore oil and gas drilling applications, for up to $240 million.
The purchase price includes about $95 million in cash and up to $145 million deferred over two years, provided the company meets growth and profit targets. Weir will fund the acquisition from existing bank facilities.
Mathena manufactures a range of pressure control products including hydraulic chokes, mud-gas and shale-gas separators including proprietary technology for fluid separation and containment designed to meet the increasing environmental and safety requirements of shale drilling.
In addition to its manufacturing expertise, Mathena differentiates itself through a strong customer service culture, product innovation and the ability to offer complete bespoke rental and service packages. The acquisition will increase the aftermarket focus of Weir Oil & Gas with approximately 80% of Mathena’s revenues generated from equipment rental and 20% from related parts and service.
Weir believes the acquisition is a strong strategic fit and will support the expansion of Weir’s flow back services. Mathena further balances exposure between the Oil & Gas division’s pressure pumping and pressure control operations.
In addition to extending Weir’s addressable market by over $500 million, the purchase expands Weir’s presence in the U.S. drilling market and broadens its pressure control customer base. The transaction is expected to close before yearend.
Weir Chief Executive, Keith Cochrane, said: “This deal is a close strategic fit with our existing pressure control business and gives us a larger suite of products which we can sell to the expanded customer base. The business has strong growth potential and increases our exposure to shale oil and gas, markets with attractive long term structural growth prospects.”
Privately-held Mathena Inc is based in El Reno, Okla. and produces pressure control solutions in drilling applications from 12 service facilities in the U.S. The company’s gross assets on Dec. 31, 2011 were $75 million, with before-tax profits at $46 million.
Weir is a FTSE 100 company based in Glasgow, Scotland. It provides engineering solutions to the minerals, oil and gas and power sectors.