National Oilwell Varco Inc.
) has completed the $670 million or 3.8 billion Danish Kroner
acquisition of Denmark-based NKT Flexibles I/S ("NKT"). In
early February, National Oilwell had first announced plans to buy
Danish company NKT Holding and Norwegian firm Subsea 7 S.A.,
having a respective interest of 51% and 49%, formed NKT Flexibles
to design and produce flexible pipe products and systems for the
offshore oil and gas industry.
NKT Flexibles also manufactures products related to Floating
Production, Storage and Offloading vessels (FPSOs) and other
offshore vessels, plus subsea production systems including
flow-lines and flexible risers.
With this acquisition, National Oilwell will reap benefits from
NKT Flexibles' advanced technical design capability and skilled
manpower. The collaboration will also place National Oilwell in a
commanding position in the offshore production market, as well as
expand its global foothold by venturing into the developing sectors
of the energy industry.
Following strong exposure in the FPSO market, National Oilwell
also intends to sell about $150 million in equipment to FPSO, up
from the earlier level of $120 million to $130 million.
Houston, Texas-based National Oilwell Varco is a world leader in
the design, manufacture, and sale of comprehensive systems,
components, products, and equipment used in oil and gas drilling
and production worldwide.
We like the company's healthy backlog, solid balance sheet and
strength in international operations, particularly in the Middle
East and Brazil.
However, we think the current valuation is fair and adequately
reflects the company's future growth prospects. Hence, we maintain
our long-term Neutral recommendation on the stock.
National Oilwell, which operates with other players such as
Cameron International Corp.
Weatherford International Ltd.
), currently retains a Zacks #3 Rank (Hold rating) for the short
NATL OILWELL VR (
): Free Stock Analysis Report
To read this article on Zacks.com click here.