Weir share price: Firm acquires Delta Industrial Valves Inc

Weir share price: Firm acquires Delta Industrial Valves Inc

Weir Group Plc (LON:WEIR) today announced the acquisition of Delta Industrial Valves Inc., a US manufacturer of knife gate valves used in mining, oil sands and other industries.

Weir agreed to pay up to $47 million for the Michigan-based company. $37 million is to be paid upon completion of the acquisition, while a further $10 million will be paid over the following 18 months, contingent on the business meeting profit growth targets.
Delta has generated pre-tax profit of about $6.2 million over the past twelve months, and the acquisition will be immediately earnings accretive, Weir said in today’s statement.
The deal is expected to be finalised within the next few days.
“Weir is a global leader in process critical products in the mining and oil sands markets and the acquisition of Delta further strengthens our comprehensive offering to customers,” Weir chief executive Keith Cochrane commented. “Delta’s strong brand and reputation, together with Weir’s global capability, mean we will be able to offer our customers new ways to increase efficiency at a time when the industry is focused on reducing costs and increasing productivity.”
Weir will finance part of the deal with an additional listing of equity. The engineering company applied for a listing of 593,934 ordinary shares of 12.5 pence each. Admission is expected to occur tomorrow.
Investors did not seem to approve of the deal, however, with Weir’s share price having dropped 1.90 percent to a six-month low of 1,634.28p as of 09:23 BST today, underperforming the FTSE 100 which was some 0.1 percent in the red. The company’s stock is down more than 40 percent on an annual basis.
As of 09:56 BST, Tuesday, 07 July, The Weir Group PLC share price is 1,632.00p.

By Veselin Valchev
Veselin is a data scientist with extensive experience in commodities and natural resources within the FTSE 100. His data analysis skills ensure he reports without missing the fine details.
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