NOV Takes Over Robbins & Myers - Analyst Blog
February 22 2013 - 10:30AM
Zacks
Oilfield services behemoth
National Oilwell Varco Inc. (NOV) has closed its
previously announced acquisition of smaller rival Robbins &
Myers Inc. for about $2.5 billion in cash. The transaction, which
was declared in August, 2012, was completed following the receipt
of requisite antitrust clearance. As per the deal, Robbins &
Myers’ shareholders would get $60 in cash for each share they
hold.
Robbins & Myers specializes in the manufacture of critical well
drilling equipment parts – including valve controls and grinders –
to manage the flow of oil and gas in drilling operations.
The acquisition – National Oilwell Varco’s largest in more than
four years – will allow the energy equipment contractor to broaden
scale and scope of the solutions that it offers to oil and gas
customers worldwide. Post merger, National Oilwell Varco expects
Robbins & Myers’ complementary products to benefit its product
line of well tools, pumps and valves.
In particular, the move will help National Oilwell Varco to
strengthen its position as a supplier of blowout preventer (a
critical safety machine that can shut a well off in case of an
emergency), as Robbins & Myers is the fourth largest maker of
such devices.
Zacks Rank
National Oilwell Varco, which ranks ahead of Cameron
International Corp. (CAM) as the biggest U.S. maker of
oilfield equipment, currently retains a Zacks Rank #4 (Sell),
implying that it is expected underperform the broader U.S. equity
market over the next one to three months.
Stocks to Consider
While we expect National Oilwell Varco to perform below its peers
and industry levels in the coming months and see little reason for
investors to own the stock, one can look at McDermott
International Inc. (MDR) and Patterson-UTI Energy
Inc. (PTEN) as good buying opportunities. These energy
equipment suppliers – sporting a Zacks Rank #2 (Buy) – have solid
secular growth stories with potential to rise from current
levels.
CAMERON INTL (CAM): Free Stock Analysis Report
MCDERMOTT INTL (MDR): Free Stock Analysis Report
NATL OILWELL VR (NOV): Free Stock Analysis Report
PATTERSON-UTI (PTEN): Free Stock Analysis Report
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