The Weir Group PLC has entered into an agreement to sell its Flow Control division to First Reserve, a leading global private equity investment firm focused exclusively on energy, for an Enterprise Value of £275m, payable in cash and subject to customary working capital and debt-like adjustments at closing. The transaction remains subject to certain regulatory and other approvals, with completion expected in Q2 2019.  

Flow Control primarily provides highly engineered pumps, valves and other solutions used in power, industrial and downstream oil and gas applications.  The plan to sell the division was first announced on 19 April 2018 alongside the acquisition of ESCO, which further strengthened Weir's leadership position in global mining markets. Once this transaction completes, on a pro forma basis, more than 80% of Weir's revenues will be from attractive aftermarket-intensive mining and upstream oil and gas markets. 

Commenting, Weir Group CEO Jon Stanton said:
"We are pleased to announce the sale of Flow Control to First Reserve. This is a high-quality business with great people and I'd like to thank the team for their longstanding contribution to the Group and dedication throughout the sale process.  

The decision to sell Flow Control is part of Weir's recent portfolio transformation which focuses the Group on where we can maximise long-term value - building on our strong global leadership positions in mining and upstream oil and gas markets."

Jeff Quake and Neil Hartley, Managing Directors of First Reserve, commented:
"First Reserve has deep historical experience creating value for our investors in the flow control space, and we are pleased to partner with Weir in this carve-out transaction. In our view, Weir Flow Control represents an attractive growth platform in a fragmented sector, with internationally recognized brands driven by recurring high-margin aftermarket parts and services which have proven to be resilient through multiple economic environments. We look forward to supporting David Paradis and his talented management team to promote both organic growth and acquisitive expansion of the platform as we seek to drive value on behalf of our investors."

After the sale completes, Flow Control will continue to be led by current President David Paradis and his management team.  David Paradis commented: 

"Weir Flow Control provides high-quality products and services, critical to the safe operations of our clients in the downstream, midstream, utility, and industrial end markets. As an organisation, we enjoy strong long-term relationships with our customers and pride ourselves on innovation that places the customer first. We thank Weir Group for their support over the years and are excited to partner with First Reserve in this next chapter for our company.  We look forward to benefiting from First Reserve's experience in the flow control sector as we seek to grow our global business." 

KeyFacts Energy Industry Directory: Weir Oil & Gas