Weir Group seals £275m sale of Flow Control arm

Weir Group, the Glasgow-headquartered engineering heavyweight, has agreed to sell its Flow Control division to private equity outfit First Reserve in a £275 million deal.
Weir Group is one of the best known names in Scotland's engineering sector. Picture: John DevlinWeir Group is one of the best known names in Scotland's engineering sector. Picture: John Devlin
Weir Group is one of the best known names in Scotland's engineering sector. Picture: John Devlin

The division supplies precision pumps and valves that are used in power, industrial and downstream oil and gas applications.

Plans to sell the operation were first announced last April alongside Weir’s bumper $1 billion-plus (£760m) acquisition of US-based Esco Corporation.

Hide Ad
Hide Ad

Once the Flow Control deal completes, more than 80 per cent of Weir’s revenues will be from “attractive aftermarket-intensive mining and upstream oil and gas markets”, the group added.

Chief executive 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, joint managing directors of First Reserve, said: “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 recognised brands driven by recurring high-margin aftermarket parts and services which have proven to be resilient through multiple economic environments.”

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

Paradis added: “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.”

Weir said it would retain the UK defined benefit pension liabilities of the Flow Control business and as a result has agreed to make a £4m one-off contribution from the proceeds of the sale to the pension scheme.

Hide Ad
Hide Ad

In November, Weir Group flagged “good” long-term prospects with a solid order book despite a temporary slowdown in the North American oil and gas market.

In an update, Stanton said: “Group orders continued to grow strongly in markets that have good long-term prospects. In mining, our largest market, we benefited from our global presence as we worked closely with customers to help them increase production.”