UK-based Weir Group plc this week struck a $176 million deal to acquire Dallas-based Novatech LLC, its second oilfield services purchase in two months. The transaction would give Weir an even bigger footprint in North America's onshore.
Weir now owns a half-stake in the supply of high-pressure pumps used in North America's unconventional fields. The latest acquisition would allow it to expand its manufacturing capabilities in Fort Worth, TX, and Edmonton, Canada, to deal with a big backlog of orders from rig operators.
"Novatech is a respected brand in the U.S. upstream oil and gas markets, with strong market share in the frack consumables market," said Weir CEO Keith Cochran. "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."
Two months ago Weir paid $675 million to acquire Houston's Seaboard Holdings Inc. (see Shale Daily, Nov. 29, 2011). Seaboard extended Weir's presence in the frack rental market and gave it proprietary surface wellhead systems and related services for conventional and unconventional wells. That transaction basically doubled Weir's share of the global fracking surface equipment market to about 10%.
Family-owned Novatech, privately held since 1970, provides a variety of proprietary valves and valve seats for high-pressure applications that include hydraulic fracturing (fracking), cement and mud pumps that are used in unconventional oil and gas operations. It long has been a Weir supplier.
"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," said Novatech CEO Starr L. Pitzer Jr. "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."
Cochran noted that 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."
According to Weir, the acquisition, expected to be completed in February, would enable it to offer an enhanced package of aftermarket pump expendables to oil and gas service companies and use its footprint to provide more opportunities for Novatech products.