British pumps and valves maker Weir said it agreed to buy U.S. manufacturer Seaboard Holdings Inc for $675 million (432 million pound) in a deal which will boost its presence in the booming shale oil and gas industry in North America.
Weir said on Wednesday that it expected the acquisition of Houston-based Seaboard to be immediately earnings accretive and added that Seaboard's equipment would broaden its offering in the shale drilling market.
The production of unconventional oil and gas, where hydrocarbons are extracted from shale and sands, has experienced huge growth in North America in recent years, benefiting firms like Weir and Seaboard, whose technology is used in the process.
The acquisition of Seaboard is consistent with Weir's strategy of extending its upstream market presence in aligned markets with positive fundamentals, Weir said in a statement, adding that it would pay for the deal from new and existing bank facilities.
Weir's heavy-duty pumps are used to force sand and chemicals into the ground to push out hydrocarbons while Seaboard's equipment is used to control pressure in the wells.
Completion of the deal is subject to US regulatory clearance and subject to achieving that is expected to close in December 2011, said Weir.
Shares in Weir closed at 1,741 pence on Tuesday, valuing the firm at 3.7 billion pounds.
(Reporting by Sarah Young; Editing by Kate Holton)