Oilfield services behemoth
National Oilwell Varco Inc.
) has closed its previously announced acquisition of smaller
rival Robbins & Myers Inc. for about $2.5 billion in cash.
The transaction, which was declared in August, 2012, was
completed following the receipt of requisite antitrust clearance.
As per the deal, Robbins & Myers' shareholders would get $60
in cash for each share they hold.
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
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, currently
retains a Zacks Rank #4 (Sell), implying that it is expected
underperform the broader U.S. equity market over the next one to
Stocks to Consider
While we expect National Oilwell Varco to perform below its peers
and industry levels in the coming months and see little reason
for investors to own the stock, one can look at
McDermott International Inc.
Patterson-UTI Energy Inc.
) as good buying opportunities. These energy equipment suppliers
- sporting a Zacks Rank #2 (Buy) - have solid secular growth
stories with potential to rise from current levels.
CAMERON INTL (CAM): Free Stock Analysis
MCDERMOTT INTL (MDR): Free Stock Analysis
NATL OILWELL VR (NOV): Free Stock Analysis
PATTERSON-UTI (PTEN): Free Stock Analysis
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