The Weir Group to acquire rental equipment manufacturer Mathena
The Weir Group plans to acquire Mathena, Inc., the Oklahoma-based manufacturer or mud-gas pressure control rental equipment. Mathena is a leading provider of pressure control rental equipment and service for onshore oil and gas drilling operations.
The Weir Group has agreed to an initial payment of $240 million with a maximum deferred payment of $145 million payable over two years, contingent upon meeting profit growth targets, according to a news release from the company.
Mathena manufactures a range of pressure control products including hydraulic chokes, mud-gas and shale-gas separators. The company also has proprietary technology for fluid separation and containment designed to meet the increasing environmental and safety requirements of shale drilling.
The acquisition will increase the aftermarket focus of Weir Oil & Gas with approximately 80% of Mathena’s revenues generated from equipment rental and 20% from related parts and service.
The acquisition fits with Weir Seaboard in the pressure control market and supports the expansion of Weir’s flow back services. Mathena further balances exposure between the Oil & Gas division’s pressure pumping and pressure control operations and enables Weir to:
- Provide pressure control solutions across the drilling, completion and production lifecycles
- Accelerate the growth of the business through Weir’s extensive North American and international footprint
- Benefit from the technology requirements of increasing environmental and safety regulation
- Cross-sell a broader pressure control portfolio to the enlarged complementary customer base
- And realize cost and operational synergies across the value chain through Weir’s lean processes.
The acquisition of Mathena also expands Weir’s presence in the large U.S. drilling market and broadens its pressure control customer base. The Mathena management team will remain with the business. The acquisition is expected to be completed by the end of this year.
“This deal is a close strategic fit with our existing pressure control business and gives us a larger suite of products which we can sell to the expanded customer base. The business has strong growth potential and increases our exposure to shale oil and gas, markets with attractive long term structural growth prospects,” says Weir Chief Executive Keith Cochrane.