Glasgow’s Weir Group (LON: WEIR) has bought American shale-sector services company Mathena in a deal that’s estimated to be worth around $385 million, marking Weir’s major entry into the American shale oil and gas sector.
Mathena develops pressure-control products like chokes, fluid separation technology, and other components required by shale developers to comply with environmental regulations.
Weir is making an upfront payment of $240 million and will pay another $145 million depending on profit growths. The deal means Weir’s market reach has jumped by almost $0.5 billion.
From The Courier:
“Mathena is a well-regarded business in the US upstream oil and gas markets, with a strong management team and market share in the pressure-control drilling markets,” he [Weir chief Keith Cochrane] said.
Weir’s objective is fairly straightforward—it would like to create the market’s “primary” pressure-control components supplier. Mathena should see earnings of some $49 million this year, prior to interest, taxes, etc. The present management team will continue.
Standard U.S. regulatory approval is pending, though everything should be wrapped up by year’s end. Shares rose to 1,863p (up 51p) after the deal was announced.