HOUSTON, Dec. 9, 2013 /PRNewswire/ -- MRC Global Inc.
(NYSE: MRC) announced today that it has entered into an agreement
to acquire privately held Stream AS for approximately $260 million (Norwegian Kroner 1.60 billion) including the assumption of
debt. Headquartered in Norway, Stream's 2013 revenues are estimated
at $273 million (Norwegian
Kroner 1.68 billion). Stream is the
leading pipe, valve and fittings (PVF) distributor and provider of
flow control products, solutions and services to the offshore oil
and gas industry on the Norwegian Continental Shelf (NCS), the
world's largest offshore sector. The acquisition is expected to
close in January 2014, subject to
normal and customary closing conditions, and MRC Global expects to
fund the acquisition of Stream through the use of MRC's existing
credit facilities. The selling shareholders of Stream are
HitecVision and Converto Capital.
MRC Global also announced today that it has acquired Flangefitt
Stainless Ltd. Flangefitt, headquartered in Warrington, England, with a location in
Aberdeen, Scotland, is a leading
pipe, flange and fitting (PFF) distributor to the oil and gas
industry. Flangefitt's 2013 revenues are estimated to be
approximately $28 million and it will
be operated as "MRC Flangefitt". MRC Global expects the
acquisitions to be modestly accretive in 2014.
Andrew Lane, MRC Global Chairman,
President and Chief Executive Officer, commented, "These
acquisitions continue our multi-year international growth strategy,
complement our previous international acquisitions and are expected
to allow us to achieve over $900
million in international segment revenues in 2014, with a
target of over $1.0 billion in 2015.
The Stream acquisition provides MRC Global a platform for growth in
offshore applications where our major customers have been very
active. The acquisition of Flangefitt's PFF business complements
our existing U.K. based, MRC Transmark valve business as well as
the Stream Energy Piping business. We now have the full range of
pipe, valves and fittings (PVF) to serve both the NCS and the U.K.
Continental Shelf (UKCS) sectors as well as global projects with
high-end alloy PFF requirements."
"We are very pleased to welcome Steinar
Aasland, Stream's Chief Executive Officer, and his
management team along with Stream's 500 experienced and dedicated
employees to the MRC Global team. Steinar will lead our offshore
center of excellence from Stavanger as a Senior Vice President of
the company. We are also delighted to be adding Jim Nulty and Phil
Oakes, the general managers of Flangefitt, to our U.K.
management group and to welcome Flangefitt's other 36 knowledgeable
and skilled employees, to the MRC Global team," concluded Mr.
Lane.
Mr. Aasland commented, "We are very pleased to be joining MRC
Global. Combining the offshore strengths of Stream to MRC Global's
core PVF offerings creates the leading PVF distribution platform in
oil and gas for both land and offshore applications. The Stream
management team and employees are pleased to become part of the
industry leader."
Jim Nulty, General Manager of MRC
Flangefitt, commented, "We are very pleased to be joining the
leader in PVF distribution to the oil and gas industry, and
combining Flangefitt's broad PFF high alloy offering and our
extensive range of services to MRC's global project capabilities,
which further enhance our value proposition to our
customers."
Conference Call
The company will host a conference call at 4:00 p.m. central time (5:00 p.m. eastern time) on Monday, December 9, 2013, regarding these
acquisitions. To participate in the call, dial 480-629-9819,
and ask for the MRC Global conference call. To access it live over
the Internet, please log onto the web at http://www.mrcglobal.com
and go to the "Investor Relations" page of the company's website at
least fifteen minutes early to register, download and install any
necessary audio software. For those who cannot listen to the live
call, a replay will be available through December 23, 2013 and may be accessed by dialing
303-590-3030 and using pass code 4654960#. Also, an archive of the
webcast will be available shortly after the call at
http://www.mrcglobal.com for 90 days.
More about Stream AS
Stream has long-term relationships and framework agreements with
leading oil and gas exploration and production companies as well as
engineering, procurement and construction companies operating on
the NCS, which is the largest offshore sector in the world with
spending of approximately $32 billion
in 2012 based on Rystad Energy's 2012 Global Offshore Oil & Gas
Exploration & Production Spend analysis.
Stream has developed long-standing relationships with leading
suppliers providing approximately 29,000 stock keeping units from
over 700 suppliers, including one key supplier relationship going
back 60 years. With approximately 500 employees including 100
engineers, Stream provides the technical expertise demanded in the
challenging offshore environment. Consistent with MRC Global's
growth strategy in industrial valves, Stream is the largest valve
servicing organization in the Nordic region and provides a key role
in qualifying suppliers to meet the NORSOK quality standards.
Stream has developed a systemized approach in fulfilling
customer needs through its Service, Hardware, Engineering,
Logistics and Functionality (SHELF) value proposition that focuses
on cost efficiency, service and aftermarket support to reduce
customers' lifecycle supply chain costs. Post-acquisition, MRC
Global plans for its newly acquired Norwegian business to become
the core of MRC Global's offshore center of excellence, upon which
the company can target growth through the SHELF approach in other
key offshore markets including the United Kingdom Continental
Shelf, Southeast Asia and
Australia.
Stream has seven facilities servicing the NCS and one facility
serving the chemical industry in Germany, another key growth sector for MRC
Global. Stream operates through three divisions: Energy Piping,
Solberg & Andersen and TeamTrade.
Energy Piping is one of the leaders in the piping business in
Norway and has served the
Norway sector since 1933.
Energy Piping carries a complete line of NORSOK approved
pipe, fittings and flanges in carbon steel, stainless steel,
duplex, super duplex and other high nickel alloys. NORSOK materials
are specially engineered and qualified for the harsh NCS
environment.
Solberg & Andersen has been the valve product and service
leader in Norway offering
engineering services, valve service and repair, remote diagnostics
and valve training programs in addition to a full range of valve
products since the early 1980s. Solberg & Andersen engineers
have developed a patented ValveWatch service that provides a
condition monitoring system for critical valves while in-service.
This industry leading technology is focused on providing online
condition monitoring and leak detection for critical valves and
actuators in one unified system. MRC Global expects to offer the
ValveWatch service globally to all of MRC's customers.
TeamTrade was founded in 1984 and has established itself as
Norway's leading supplier of
instrumentation, electro/automation and fluid control products for
oil and gas applications. The products that TeamTrade offers
include instrument fittings, valves, manifolds, tubing, gauges,
pressure/flow and temperature control products. TeamTrade also
provides its customers with engineered packages and skids that
combine these products for offshore use.
Effective with the closing, MRC Global will operate Stream's
three divisions under the names "MRC Energy Piping", "MRC Solberg
& Andersen" and "MRC TeamTrade".
More about Flangefitt Stainless Ltd.
Founded in 1985, Flangefitt specializes in piping requirements
in duplex, super duplex, 6% molybdenum, stainless steel and
nickel alloys. In its two main facilities, Flangefitt
maintains substantial stocks of European manufactured finished and
semi-finished products from NORSOK approved manufacturers.
NORSOK products are specially engineered and qualified for use in
the harsh North Sea offshore environment. Flangefitt is a
project-focused business for onshore and offshore oil and gas
applications and specializes in quality systems, including testing
of stock to the highest performance standards.
About MRC Global Inc.
Headquartered in Houston,
Texas, MRC Global, a Fortune 500 company, is the largest
global distributor of pipe, valves, and fittings and related
products and services to the energy industry, based on sales, and
supplies these products and services across each of the upstream,
midstream and downstream sectors. More information about MRC Global
can be found at www.mrcglobal.com.
Forward-Looking Statements
This news release contains forward-looking statements within
the meaning of Section 27A of the Securities Act and Section 21E of
the Exchange Act. Words such as "expected", "expects", "target",
"plans" and similar expressions are intended to identify
forward-looking statements.
The company's estimation of Stream's and Flangefitt's 2013
revenue and the company's expectations for its International
segment revenue in 2014 and 2015 are only the company's expectation
regarding these projections. Whether Stream, Flangfitt or the
company are actually successful in achieving these projected
revenues is dependent on a number of factors, including (among
others) changes in oil and natural gas industry expenditure levels,
which may result from changes in oil and natural gas prices or
other factors; U.S. and international general economic conditions;
the ability of Stream, Flangefitt or the company to compete
successfully with other companies in its industry; risks that
customers may not desire to continue to do business with Stream or
Flangefitt given the announcement of MRC Global's agreement to
acquire Stream and Flangefitt; the risk that manufacturers of the
products Stream, Flangefitt and the company distribute will sell a
substantial amount of goods directly to end users; unexpected
supply shortages or delays by suppliers; customer project delays;
cost increases by suppliers; the lack of long-term contracts with
most of the suppliers of Stream, Flangefitt and the company;
suppliers' price reductions of products that Stream, Flangefitt or
the company sells, which could reduce selling prices; decreases in
steel prices, which could significantly lower sales prices; the
lack of long-term contracts with many of the customers of Stream,
Flangefitt and the company and their lack of contracts with
customers that require minimum purchase volumes; changes in its
customer and product mix; interruption in the proper functioning of
the information systems of Stream, Flangefitt or the company; loss
of third-party transportation providers; and risks related to
adverse weather events or natural disasters.
MRC Global's plans to operate Stream as its center of
excellence for offshore applications, to expand in these
applications in key offshore markets and to offer ValveWatch are
only MRC Global's current expectations for its plans. Whether
MRC Global continues these plans are subject to a number of factors
including the successful completion of its acquisition of Stream,
which in turn is subject to the successful fulfillment of the
closing conditions in MRC Global's stock purchase agreement for the
shares of Stream, market acceptance of MRC Global's service
offerings for offshore applications or ValveWatch, MRC Global's
ability to extend Stream's service offerings to other offshore oil
and gas sectors, MRC Global's continued access to capital and
talent to grow in key offshore markets and other factors that
impact MRC Global's ability to grow its business generally,
including oil and gas prices, economic conditions and other factor
impacting offshore applications.
Undue reliance should not be placed on the company's
forward-looking statements. Although forward-looking statements
reflect the company's good faith beliefs, reliance should not be
placed on forward-looking statements because they involve known and
unknown risks, uncertainties and other factors, which may cause the
company's actual results, performance or achievements or future
events to differ materially from anticipated future results,
performance or achievements or future events expressed or implied
by such forward-looking statements. The company undertakes no
obligation to publicly update or revise any forward-looking
statement, whether as a result of new information, future events,
changed circumstances or otherwise, except to the extent required
by law.
Contacts:
James E.
Braun
Executive Vice
President and Chief Financial Officer
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Monica
Schafer
Vice President
Investor Relations
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MRC Global
Inc.
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MRC Global
Inc.
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Jim.Braun@mrcglobal.com
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Monica.Schafer@mrcglobal.com
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832-308-2845
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832-308-2847
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SOURCE MRC Global Inc.