The UK’s Weir Group has agreed to acquire US-based Seaboard Holdings for $675 million (£431 million).
Based in Houston, Texas, Seaboard manufactures engineered wellhead and pressure control equipment for the oil & natural gas exploration and production industries. The company also provides a range of field and support services, including equipment rental for the onshore oil & gas drilling, completion and production markets.
Weir said that the growing shift in North America towards unconventional oil and gas development and the rapid growth of high pressure hydraulic fracturing has increased demand for Seaboard's products and services.
Seaboard's range of high-end surface equipment is directly adjacent to Weir's portfolio of frac pumps and other well completion equipment with a business model closely aligned to Weir's core competencies in highly engineered products used in harsh environments, the company said.
Weir added that the acquisition is consistent with its strategy of extending its upstream market presence in aligned markets with positive fundamentals.
Commenting on the acquisition, Weir’s chief executive Keith Cochrane said: "Seaboard is a well-managed business, with a strong position in a market that we understand well. The acquisition is perfectly in line with strategy. It broadens our product offering and fits into our business model of growing the installed base of original equipment from which we drive aftermarket opportunities.
“There is great potential to strengthen the business further through our lean engineering and operational processes and extensive sales and service networks. We are confident that the extended market opportunities and medium term operational benefits will create significant value for our shareholders. We retain financial flexibility to pursue organic growth initiatives and further acquisition opportunities in line with our strategy."
Kelly Joy, Seaboard's president and CEO, added: "In recent months we have been looking for the ideal partner to take the business forward while retaining Seaboard's identity and commitment to customer service. We have spent a lot of time with the Weir team and have been hugely impressed by the way they have developed Weir SPM since its acquisition in 2007.
“I am convinced that this is the best outcome for our employees, customers and shareholders. The senior team at Seaboard intends to remain with the business and we are all excited by the extensive opportunities arising from the combination with Weir."
Founded in 1974, Seaboard has over 20 locations covering the major oil & gas basins in North America, employing approximately 400 people.
Headquartered in Glasgow, UK, Weir has a worldwide network of more than 140 manufacturing facilities and service centres, a presence in more than 70 countries, and 13,000 staff. Annual revenues were more than £1.65 billion in 2010.
