Pumps business sold
Weir offloads Flow Control to First Reserve for £275m
Flow Control primarily provides highly engineered pumps, valves and other solutions used in power, industrial and downstream oil and gas applications.
The plan to sell the division was announced last April alongside the acquisition of ESCO, which further strengthened Glasgow-based Weir’s leadership position in global mining markets. Once this transaction completes, on a pro forma basis, more than 80% of Weir’s revenues will be from attractive aftermarket-intensive mining and upstream oil and gas markets.
Weir Group CEO Jon Stanton, pictured, said: “We are pleased to announce the sale of Flow Control to First Reserve. This is a high-quality business with great people and I’d like to thank the team for their longstanding contribution to the Group and dedication throughout the sale process.
The decision to sell Flow Control is part of Weir’s recent portfolio transformation which focuses the Group on where we can maximise long-term value – building on our strong global leadership positions in mining and upstream oil and gas markets.”
Weir will retain the UK defined benefit pension liabilities of Flow Control and accordingly has agreed with the trustees to make a £4m one-off contribution from the proceeds of the sale to the Group’s UK defined benefit scheme, which was closed to future accrual in 2015.
In the year to 31 December 2018, Flow Control’s unaudited financial results included profit before tax of £23m on a pre-exceptional items and intangibles amortisation basis. As at 31 December 2018, the business had gross assets of £394m after the Group recognised an exceptional charge of £45m to reflect the fair value of the business less costs to sell, including separation expenditure and the transfer value of pension and other liabilities.
Weir will announce its group financial results for the full year to 31 December 2018 on 27 February.