The Weir Group PLC has agreed to acquire Novatech LLC, a US manufacturer of well service pump valves and valve seats for upstream oil and gas applications, for $176 million (£113 million) in cash.
Based in Dallas, Texas, Novatech is a family-owned business producing a wide variety of proprietary valves and valve seats for high pressure applications such as frac, cement and mud pumps used in unconventional upstream oil and gas operations.
The business is well known to Weir, being a long standing local supplier to Weir SPM.
Novatech's range of durable valves expands Weir's offering in the fast-growing frac pump consumables markets and significantly enhances its frac pump aftermarket portfolio.
"Novatech is a respected brand in the US upstream oil and gas markets, with strong market share in the frac consumables market,” said Weir chief executive, Keith Cochrane. “This deal enables Weir to broaden our aftermarket expendable product portfolio in this fast-growing sector, where increasing operating intensities require equipment and components to be more regularly replaced and serviced.
“With the recent acquisition of Seaboard, this strengthens further Weir's presence in the North American unconventional oil and gas markets and builds a larger upstream product range to offer the developing international shale markets."
President, chairman and CEO of Novatech, Starr L. Pitzer Jr, said: "We have worked with Weir's upstream business as a supplier for a number of years and have come to know the company well and admire the way they operate. Through joining the group, I believe that Weir's global sales and service networks will enable the business to grow, not only in North America, but also by taking Novatech products to international customers."
Subject to US regulatory approvals, completion of the acquisition is expected in February 2012.
