Precision Castparts Corp.
) recently announced its plans to acquire Texas Honing, Inc. The
acquisition is expected to help Precision Castparts to expand its
capabilities in the oil & gas market. Following the
acquisition, Precision will emerge as the leading supplier of
nickel alloy downhole casing to the oil & gas industry.
Precision Castparts is set to pay the entire take over price in
cash and expects the acquisition to be accretive to its earnings,
effective immediately. The deal is expected to close by the end of
fiscal 2013, subject to regulatory approvals. Texas Honing will be
integrated into the Forged products segment.
Texas Honing is a leading provider of accurate, rigid tolerance
pipe processing services, including honing, boring, straightening
and turning. Its products are used in oil & gas drilling,
completion and production applications, and other commercial
markets. Texas Honing, at the time of acquisition, has three
operating facilities in Houston, Texas, and employs about 200
This acquisition of Texas Honing comes at an opportune time for
Precision, as currently there is an upward trend in the oil &
gas industry, where giants like
General Electric Company
) also have been acquiring companies or expanding their
capabilities in the oil & gas industry. Therefore, given the
expertise of Texas Honing, Precision's capabilities in the casing
manufacturing process will be more competent and enhanced.
Furthermore, Precision will also be able to supply finished pipe in
future project bids, thereby giving the company the opportunity to
gain further share in an end market which has strong growth going
Precision Castparts Corp. is a leading manufacturer of complex
metal components and products - provides high-quality investment
castings, forgings and fasteners/fastener systems for critical
aerospace and industrial gas turbine (IGT) applications. We
currently maintain a Zacks#3 Rank, which implies a short term
'Hold' rating on the sock.
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