Weir launches sale of flow control business

By Arno Schuetze and Ben Martin
Monday, October 22, 2018

British engineer Weir has launched the sale of its flow control business in a move that could value the supplier of pumps and valves at more than 300 million pounds ($389 million), according to sources with knowledge of the matter.

Bankers for the FTSE 250 listed company have sent out confidential information about the division to prospective buyers ahead of an auction of the business, two sources told Reuters.

The unit is expected to generate core earnings of 38 million pounds next year and first round bids are due on Nov. 9, according to one of the sources. Goldman Sachs is handling the sale.

The flow control business supplies a variety of pump and valve products to a range of sectors, including the power generation and the oil and gas industries.

Glasgow-based Weir said it would offload the division in April, when it announced its $1.3 billion acquisition of U.S. mining tools business Esco Corporation.

The company traces its roots back 147 years, to when brothers James and George Weir developed a new type of pump for steamships.

The group has since grown into an engineering giant with a market value of about 3.8 billion pounds and annual revenues last year of almost 2.4 billion pounds.

The purchase of Esco, which completed in July, and disposal of the flow control unit helps to shift Weir's focus onto mining and the upstream oil and gas markets.

One of the sources said they expected flow control to fetch about eight times its estimated core earnings, which would value the division at over 300 million pounds.

U.S valve-maker Circor's purchase of Colfax's fluid handling unit a year ago valued that business at 12.3 times its adjusted earnings before interest, taxes, depreciation and amortisation, excluding synergies and tax benefits.

Including tax benefits and synergies that deal valued the Colfax unit at 8.3 times.

A Weir spokesman declined to comment.


($1 = 0.7711 pounds)

(Reporting by Ben Martin; Editing by Jan Harvey)

Categories: Pipelines Industry News Europe Flow Assurance

Related Stories

India Stretches Bids Deadline for 13 Offshore Deep-Sea Mineral Blocks

Op-Ed: Kazakhstan’s National O&G Firm Positioning Itself as Global Energy Player

Japan and South Korea Look to Partner Up with US for Alaska Pipeline

Shell Predicts 60% Rise in LNG Demand by 2040 with Asia Leading the Way

CNOOC Brings Online Second Phase of Luda Oil Field Project in Bohai Sea

ONGC and BP Sign Deal to Boost Production at India's Largest Offshore Oil Field

Petronas Preps for Sabah-Sarawak Gas Pipeline Decom Op

EnQuest to Acquire Harbour Energy's Vietnamese Assets

CNOOC Boosts Dongfang Gas Fields Output with New Platform Coming Online

BP to Help Boost Oil and Gas Output at India’s Largest Producing Field

Current News

Chuditch Gas Field Up for Summer Drilling Ops as Sunda Reshapes Ownership Structure

EnQuest Bags Two Production Sharing Contracts off Indonesia

Hanwha Drilling’s Tidal Action Drillship En Route to Petrobras’ Roncador Field

China's ENN, Zhenhua Oil Ink LNG Supply Deals with ADNOC

MODEC Wins ExxonMobil Guyana’s Hammerhead FPSO Contract

India Stretches Bids Deadline for 13 Offshore Deep-Sea Mineral Blocks

Indonesia Awards Oil and Gas Blocks to Boost Reserves

Sapura Energy Nets $22.6M in Offshore Support Vessel Contracts

CNOOC Puts Into Production New Oil Field in South China Sea

Sunda Energy Starts Environmental Consultation for Chuditch-2 Well Drilling Plans

Subscribe for AOG Digital E‑News

AOG Digital E-News is the subsea industry's largest circulation and most authoritative ENews Service, delivered to your Email three times per week

https://accounts.newwavemedia.com