First Reserve to buy Flow Control from Weir for £275m

Kenny Wastell
25 February 2019

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Energy-focused private equity house First Reserve has agreed to carve out Flow Control from listed UK mechanical engineering business Weir Group in a deal valued at ТЃ275m.

The transaction values the business at around 12x its 2018 profit before tax, according to figures released by the vendor. The divestment by the trade vendor forms part of its strategy to focus on its core activities in mining and the upstream oil and gas markets.

Flow Control will pursue both an acquisitive and organic growth strategy under its new owners.

First Reserve recently filed documents related to fundraising for its 14th flagship vehicle. The GP's 13th fund closed on $3.4bn in 2014 and was 52% deployed as of June 2018, according to Unquote Data.

The transaction is subject to regulatory approval and is expected to complete in Q2 2019.

Company
Flow Control manufacturers engineered pumps, valves and related products for use in the power, industrial and downstream oil and gas sectors. According to a statement, the business generated £23m of profit before tax in 2018 and has gross assets of £394m. Weir Group is headquartered in Glasgow and was founded in 1895.

People
First Reserve - Jeff Quake, Neil Hartley (managing directors).
Flow Control - David Paradis (president).
Weir Group - Jon Stanton (CEO).