Houston-based National Oilwell Varco Inc. (NOV) said Thursday it is paying cash to buy oilfield service provider Robbins & Myers (R&M) in a transaction valued at $2.5 billion.
NOV, considered the third largest oilfield service company in the world after Schlumberger Ltd. and Halliburton Co. (see Daily GPI, Jan. 24), has completed $2 billion in transactions this year to strengthen its technology, product and service offerings. The company, a rig technology specialist, reported in July that its backlog for capital equipment orders jumped 46% year/year in the second quarter.
R&M, which is headquartered outside of Houston in Willis, has 3,400 employees and operates in 15 countries as an oilfield services provider to the offshore and onshore industry. R&M's Energy Services Group provides down-hole pumps and systems, power sections, pipeline closures, wellhead products, tubing wear products and well control solutions. The Process and Flow Control Group manufactures and markets glass-lined reactor systems, thermal fluid systems, engineered fluoropolymer products, progressing cavity industrial pumps, grinders and mixing equipment and systems.
"Robbins & Myers has many complementary products with those National Oilwell Varco currently offers the industry," said NOV CEO Pete Miller. "I am particularly enthusiastic about the prospect of incorporating their downhole tools, pumps and valves" into NOV. "We feel that our combined manufacturing infrastructure and portfolios of technology will further advance our presence in the oil and gas markets we serve."
Under the agreement R&M shareholders would receive $60/share in cash in exchange for each of the 42.4 million shares outstanding. Robbins closed Wednesday trading at about $46.80/share. The company's largest shareholder, M.H.M. & Co. Ltd, which owns about 10% of the outstanding common shares, also agreed to vote in favor of the transaction. Both companies' boards of directors have unanimously approved the transaction, which is expected to be completed by the end of the year.
R&M CEO Pete Wallace said the transaction would allow the company "to join forces with an industry leader that will enable its business segments to fully capitalize on their respective strategies, enhance leadership positions in niche applications and execute growth plans at a faster pace.
"We have worked hard to create a focused business with reduced complexity and a culture of continuous improvement, all based on improving customer productivity and profitability. This is the right time for this transaction and I believe National Oilwell Varco is the right partner to take us to the next level of performance."
Citigroup Global Markets acted as R&M's lead financial adviser, while Thompson Hine LLP acted as legal adviser. Fulbright & Jaworski LLP acted as NOV's legal adviser.
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