Caterpillar (CAT) Reports Agreement to Acquire Oil & Gas Unit from Weir Group for $405M
Caterpillar Inc. (NYSE: CAT) has signed an agreement to acquire the Oil & Gas Division ("Weir Oil & Gas") of the Weir Group PLC, a Scotland-based global engineering business. Headquartered near Fort Worth, Texas, Weir Oil & Gas produces a full line of pumps, flow iron, consumable parts, wellhead and pressure control products that are serviced via an extensive global network of service centers located near customer operations.
"Combining Weir Oil & Gas's established pressure pumping and pressure control portfolio with Cat's engines and transmissions enables us to create additional value for customers," said Joe Creed, Vice President of Caterpillar's Oil & Gas and Marine Division. "This acquisition will expand our offerings to one of the broadest product lines in the well service industry."
The purchase price of $405 million is to be paid in cash at closing. The acquisition requires approval by Weir shareholders and is subject to review by various regulatory authorities as well as customary closing conditions. The transaction includes more than 40 Weir Oil & Gas manufacturing and services locations and approximately 2,000 employees.
"We are pleased to have reached this agreement. Caterpillar is a great new home for Weir Oil & Gas, its world-class people, products and services," said Jon Stanton, Weir Group CEO. "It will enable Weir Oil & Gas to continue to flourish, ensuring the business remains at the forefront of innovation and customer service in the future."
This acquisition is consistent with Caterpillar's strategy to invest for long-term, profitable growth through operational excellence, expanded offerings and services. Caterpillar is taking advantage of its strong balance sheet to complete this acquisition that supports the enterprise strategy.
Morgan Stanley & Co. LLC is serving as Caterpillar's exclusive financial advisor for the transaction.