Weir Group PLC Acquisition (7426H)
12 June 2017 - 4:00PM
UK Regulatory
TIDMWEIR
RNS Number : 7426H
Weir Group PLC
12 June 2017
Press Release
12 June 2017
Weir acquires leading oil and gas technology provider KOP
Surface Products
-- Acquisition of KOP(1) for c.US$114m (GBP89m(2) )
-- Increases pressure control presence and installed base in Asia and Middle East
-- Expands and complements Weir's portfolio of highly engineered
mission-critical equipment
-- Further strengthens Weir's position to benefit from oil and gas recovery
-- Trading: Full year expectations unchanged with profits H2
weighted as previously indicated
The Weir Group PLC has entered into an agreement to acquire KOP
Surface Products, a provider of advanced surface pressure control
technologies, systems and services for the oil and gas industry for
US$114m in cash. KOP's history stretches back to 1934 and it has
leading market positions in Asia, with an emerging business in the
Middle East. The business is being acquired from Akastor ASA, a
Norwegian-listed investor in oilfield services.
KOP employs approximately 450 people and designs and
manufactures wellheads, surface trees, valves, actuators and
aftermarket services. The business is headquartered in Singapore
and has a manufacturing facility in Batam, Indonesia, in addition
to a network of sales and service offices in Asia Pacific and the
Middle East. KOP's current management team will continue to lead
the business, reporting into Weir's Oil & Gas division.
In the three years ending December 2016, KOP generated an
average of US$117m in annual revenues and US$21m in annual EBITDA.
In 2017 KOP is expected to generate revenues of c.US$46m and
c.US$2m of EBITDA, reflecting current International oil and gas
market conditions. Over the next two years integration costs are
expected to total US$2m and generate run rate annual cost and
procurement synergies of c.US$2m by the end of that period, with
the potential for additional revenue synergies.
Completion is subject to the fulfilment of certain conditions
and is anticipated to take place in Q3 2017. The transaction
consideration payable to Akastor will be settled in cash, funded
through the issue of new ordinary shares equivalent to
approximately 2% of issued capital(3) . As corporate broker to
Weir, UBS has entered into an agreement in connection with this
issue of new ordinary shares. These shares will be issued, subject
to market conditions, over the coming weeks up to the middle of
August 2017 at a price determined by reference to average prices of
ordinary shares over the period.
Trading: Order input trends in April and May were in line with
expectations and the Group's full year guidance for 2017 is
unchanged. As previously indicated, and reflecting these order
trends, profits are expected to be weighted to the second half.
Commenting on the acquisition Weir Group Chief Executive Jon
Stanton said:
"KOP is a great company with a strong management team that we
have admired for some time. It is a natural fit for Weir and
extends our range of wellhead and other pressure control solutions.
KOP's position in Asia also complements Weir's leading presence in
North America and the Middle East and means our group is in an even
stronger position to benefit as oil and gas markets recover in the
future."
Ends
Notes:
1 Weir will acquire 100% of KOP Surface Products for US$114m
payable in cash on completion.
2 Exchange rate of $1 = GBP1.274 at closing in London on 09 June
2017.
3 Based on Weir Group closing share price on 09 June 2017.
About KOP Surface Products
KOP Surface Products is a leading global supplier of surface
wellheads, surface trees, valves and actuators to the oil and gas
industry. It provides full life-of-field support to customers,
including installation, maintenance, rental and refurbishment
services. Its client list includes some of the largest names in the
industry and its products and quality programmes comply with the
highest international standards. Accreditations include: ISO
9001:2008, API Q1, API 6A, API 16A, ISO 14001 and OHSAS 18001. The
business employs 450 people and has leading positions across a
number of countries in Asia Pacific, including Thailand, Indonesia
and India, with a growing presence in the Middle East.
About The Weir Group PLC
Founded in 1871, Weir is one of the world's leading engineering
businesses providing mission-critical equipment and aftermarket
solutions to energy and natural resources customers in more than 70
countries. The group, which employs around 14,000 people, comprises
three divisions: Minerals; Oil & Gas; and Flow Control, and is
headquartered in Glasgow, Scotland, UK.
Weir's ordinary shares trade on the London Stock Exchange
(ticker: WEIR LN) and its American Depositary Receipts trade
over-the-counter in the USA (ticker: WEGRY).
Enquiries:
----------------------------- ---------------------------
Investors: Stephen Christie +44 (0) 141 637 7111
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+44 (0) 141 637 7111 / +44
Media: Raymond Buchanan (0) 771 326 1447
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Brunswick: Patrick Handley +44 (0) 20 7404 5959
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This information is provided by RNS
The company news service from the London Stock Exchange
END
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