Large-cap oilfield services company
National Oilwell Varco Inc.
) has agreed to acquire smaller rival
Robbins & Myers Inc.
) for about $2.5 billion in cash.
CAMERON INTL (CAM): Free Stock Analysis Report
NATL OILWELL VR (NOV): Free Stock Analysis
ROBBINS & MYERS (RBN): Free Stock Analysis
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The transaction has been approved by the boards of both
Houston-based companies but awaits regulatory and shareholder
approval. In particular, the deal needs the go-ahead of at least
two-thirds of Robbins & Myers shareholders. We expect the
buyout to conclude during the fourth quarter of
M.H.M. & Company - Robbins & Myers' largest shareholder
that controls about 10% of the shares - have agreed to vote in
favor of the transaction.
As per the deal, Robbins & Myers shareholders would get $60 in
cash for each share they hold. At Robbins & Myers' Wednesday
closing stock price of $46.80 on the New York Stock Exchange, the
deal values the company's shares at a 28% premium.
Robbins & Myers specializes in the manufacture of critical well
drilling equipment parts - including valve controls and grinders -
to manage the flow of oil and gas in drilling operations.
The acquisition - National Oilwell Varco's largest in more than
four years - will allow the energy equipment contractor to broaden
scale and scope of the solutions that it offers to oil and gas
customers worldwide. Post merger, National Oilwell Varco expects
Robbins & Myers' complementary products to benefit its product
line of well tools, pumps and valves.
In particular, the move will help National Oilwell Varco to
strengthen its position as a supplier of blowout preventer (a
critical safety machine that can shut a well off in case of an
emergency), as Robbins & Myers is the fourth-largest maker of
National Oilwell Varco, which ranks ahead of
Cameron International Corp.
) as the biggest U.S. maker of oilfield equipment, is currently a
Zacks #3 Rank (Hold) stock, implying that it is expected to perform
in line with the broader U.S. equity market over the next one to
three months. We are also maintaining our long-term Neutral
recommendation on the stock.