Houston-based MRC Global Inc. (MRC - Analyst Report) recently announced the acquisition of the Flow Control Products business from privately-held Dan H. Brown Inc. for an undisclosed amount. Subject to regulatory approvals, the acquisition is expected to close in the third quarter of 2013.
Flow Control was established in 1981 and provides its products and services to energy companies based in the Permian Basin. The business supplies electro-hydraulic, electric and pneumatic valve automation packages to production facilities, pipelines and plant operations in the region. The business had a sales turnover of $28 million in 2012.
MRC Global, on the other hand, is in the process of scaling up its existing facility in Odessa to an 110,000 feet Regional Distribution Centre. The expansion is expected to conclude in 2014. Following its acquisition, Flow Control will resume its operations as an MRC Valve Automation Center. This new business will be 25th on the list of MRC’s global automation centers.
All the 25 employees working with Flow Control at present will continue working with the business after the acquisition. This strategic move by MRC Global reaffirms its commitment to strengthen its position in the major oil producing regions in the U.S.
The facility is strategically located in the Permian Basin, which is the most active oil producing region in the U.S. The automation center will cater to the needs of MRC Global customers in all the 25 service locations of MRC in the Permian Basin and Texas Panhandle.
Subsequent to the acquisition, MRC Global will be in a better position to serve its customers and strengthen its foothold in the region. The stock currently carries a Zacks Rank #4 (Sell). However, there are many other stocks in the machinery industry that are performing better than MRC. Mueller Water Products, Inc. (MWA - Snapshot Report), carrying a Zacks Rank #1 (Strong Buy), and Valmont Industries, Inc. (VMI - Analyst Report) and Lincoln Electric Holdings Inc. (LECO - Analyst Report) carrying a Zacks Rank #2 (Buy) each, look attractive and are worth considering.