Weir Group in £89m swoop for Singapore rival KOP

Glasgow-based engineer Weir Group has struck a deal to buy a Singapore-headquartered wellhead services outfit for $114 million (£89m) in cash.

Weir expects to complete the purchase of KOP in the third quarter. Picture: John Devlin
Weir expects to complete the purchase of KOP in the third quarter. Picture: John Devlin

The firm is buying KOP Surface Products, which employs about 450 people, from Norway’s Akastor and said the deal would expand its presence in the pressure control market in Asia and the Middle East as it seeks to strengthen its position amid a recovery in the oil and gas sector.

KOP, which traces its roots back to 1934, designs and manufactures wellheads, surface trees, valves, actuators and aftermarket services. It is based in Singapore and has a manufacturing facility in Indonesia, along with a network of sales and service offices across the Asia Pacific and Middle East. Its current management team will continue to lead the business, reporting into Weir’s Oil & Gas division.

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In the three years to December 2016, KOP generated an average of $117m in annual revenues and $21m in underlying pre-tax profits. It is expected to delver earnings of about $2m this year, on sales of $46m.

The deal, targeted for completion in the third quarter, will be funded by the issue of new Weir shares equivalent to about 2 per cent of its issued capital.

Weir chief executive Jon Stanton said: “KOP is a great company with a strong management team that we have admired for some time. It is a natural fit for Weir and extends our range of wellhead and other pressure control solutions.

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“KOP’s position in Asia also complements Weir’s leading presence in North America and the Middle East and means our group is in an even stronger position to benefit as oil and gas markets recover in the future.”