Weir Group Plc · LSE:WEIR
Weir — The Weir Group — Merger or Acquisition (January 2012)
14 slides from Weir's merger presentation, Jan 25, 2012
Slide 1: Acquisition of Novatech LLC
The Weir Group PLC Acquisition of Novatech LLC Acquisition of Novatech LLC 25 January 2012 Excellent Engineering Solutions
Slide 2: Overview
The Weir Group PLC 2 Overview US$176m (£113m(1)) acquisition of Novatech LLC Leading provider of well service pump expendables (valves and valve seats) 90% of revenue generated from aftermarket Acquired from family ownership 7.0x unaudited pro-forma(2) EBITDA in year to September 2011 Further progre
Slide 3: Overview of Novatech
The Weir Group PLC 3 Overview of Novatech Revenue by end market category 9% Manufactures a full range of valve and valve seats 10% Premium product offering Fracking products Drilling products Multiple pump applications from drilling to well services Other 81% Cast-N-Place™ insert (patented) Source:
Slide 4: Strong alignment with Weir's upstream pressure pumping offering
The Weir Group PLC 4 Strong alignment with Weir’s upstream pressure pumping offering SPM Destiny™ TWS 2500 frac pump Fluid end and associated component parts Novatech Discharge valve Discharge valve seat Fluid end Power end Mesa Plunger Suction valve Suction valve seat Novatech Acquisition Acquisiti
Slide 5: Well service valve market & Novatech's position
The Weir Group PLC 5 Well service valve market & Novatech’s position Well service valve & valve seat market (US$m) 250.0 Estimated North American market of $220m in 2011 200.0 Market more than doubled since 2010, quadrupled since 2009 150.0 100.0 Largely North American, driven by hydraulic fracturin
Slide 6: Background and historic performance
The Weir Group PLC 6 Background and historic performance Founded early 1980s by current management Sales US$m pro-forma (1) History of developing innovative solutions for oilfield applications 70 60 CAGR 93% 50 Based in Dallas, Texas 40 30 61.6 30,000 sq.ft. manufacturing facility 20 32.7 10 16.6 c.
Slide 7: Leveraging Weir's comprehensive service network
The Weir Group PLC 7 Leveraging Weir’s comprehensive service network Opportunity Opportunity to to directly directly serve serve common common customer customer base base using using Weir’s Weir’s footprint footprint
Slide 8: High growth potential
The Weir Group PLC 8 High growth potential Shale oil production (kbd) 2000 Source: Morgan Stanley (Jun-11) Positive underlying market growth 1500 Strong fundamentals support medium term growth of shale markets 1000 Oil and liquid rich plays expected to continue to take greater share 500 Frac demand
Slide 9: Key transaction and funding terms
The Weir Group PLC 9 Key transaction and funding terms US$176m to be paid in cash on completion Consideration equates to less than 3% of Weir’s market capitalisation Funded through existing debt facilities Pro-forma 2011E net debt of c.1.7x EBITDA (including Seaboard acquisition) Continued strong ca
Slide 10: Summary
The Weir Group PLC 10 Summary Strong #2 in well service pump expendables (valves & valve seats) Extends Weir’s Critical components of frac pump, 90% aftermarket leadership in pressure pumping Same positive fundamentals exposure as SPM and Mesa Same customer base as SPM and Mesa Aligned to Weir’s Eng
Slide 11: Appendix
The Weir Group PLC 11 Appendix Novatech manufacturing facility and head office, Near Dallas, Texas Excellent Engineering Solutions
Slide 12: Novatech product range
The Weir Group PLC 12 Novatech product range
Slide 13: Weir Oil & Gas division overview
The Weir Group PLC 13 Weir Oil & Gas division overview 2010 Input by business line £m 2008 (1) 2009 (1) 2010 Downstream Upstream Input OE 157 124 289 Services Input aftermarket 176 194 337 Input total 333 318 626 2010 Input by geography % Revenue OE 140 119 194 Emerging markets Revenue aftermarket 1
Slide 14: Acquisition of Novatech LLC
The Weir Group PLC Acquisition of Novatech LLC Acquisition of Novatech LLC 25 January 2012 This presentation contains certain forward-looking statements. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. In particular, all sta
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