Weir Group PLC · LSE:WEIR
Weir — The Weir Group — Merger or Acquisition (June 2007)
18 slides from Weir's merger presentation, June 2007
Slide 1: Acquisition of SPM Flow Control Inc.
The Weir Group PLC | Analyst Pack Excellent Engineering Solutions Acquisition of SPM Flow Control Inc.
Slide 2: Overview: recent history of Weir Group
The Weir Group PLC | Acquisition of SPM Flow Control, Inc. Excellent Engineering Solutions Agenda Overview Recent history Market attractiveness Portfolio 2002 2006 transformed Market cap Non core businesses sold Share price £2.12 £1.3bn Under-performers restructured Competitive Market cap £433m Up
Slide 3: Acquisition of SPM
The Weir Group PLC | Acquisition of SPM Flow Control, Inc. Excellent Engineering Solutions Agenda Overview Acquisition of SPM Will have meaningful impact on Weir Group Naval & marine results Power generation Oil & gas Minerals processing Exposure to the faster growing upstream oil Water market w
Slide 4: SPM company overview
The Weir Group PLC | Acquisition of SPM Flow Control, Inc. Excellent Engineering Solutions SPM company overview Sales $m FINANCIALS Profit $m $300m global supplier of well- 250 100 service pumps, associated flow 208.6 control equipment and services to 200 80 the oil & gas production industry SALES
Slide 5: SPM products – pumps
The Weir Group PLC | Acquisition of SPM Flow Control, Inc. Excellent Engineering Solutions SPM products – pumps Sales $m* SALES - PUMPS Units Range of 23 patented pump products and associated 200 1200 spare parts used mainly in the fast-growing area of well-stimulation. 160 150.4 960 Increasing
Slide 6: SPM products and services
The Weir Group PLC | Acquisition of SPM Flow Control, Inc. Excellent Engineering Solutions SPM products and services $m FLOW CONTROL PRODUCTS $m SERVICES 45 42.4 18 41.5 15.8 40 SALES 16 15.0 SALES 35 14 11.9 30 25.9 12 25 21.7 10 20 8 6.7 15 6 10 4 5 2 0 0 YEAR END YEAR END YEAR END 9 MNTHS TO YEAR
Slide 7: SPM – key market drivers
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Slide 8: SPM – 100 day integration objectives
The Weir Group PLC | Acquisition of SPM Flow Control, Inc. Excellent Engineering Solutions SPM – 100 day integration objectives Utilising experienced Building on a robust Weir Group will assist to executive team to connect foundation move new products the pieces forward and put structure to their su
Slide 9: World class capability: Leading product to growing market
The Weir Group PLC | Acquisition of SPM Flow Control, Inc. Excellent Engineering Solutions World class capability: Leading product to growing market WORLD CLASS CAPABILITY GROWING MARKET LEADING PRODUCT High-wear materials Enhanced capabilities Oil & Gas Lean processes to improve performance
Slide 10: Weir & SPM combined
The Weir Group PLC | Acquisition of SPM Flow Control, Inc. Excellent Engineering Solutions Weir & SPM combined A balanced portfolio with exposure to high growth markets and segments. PRO FORMA REVENUE PRO FORMA REVENUE BY SECTOR BY GEOGRAPHY 25% INDUSTRIAL, NAVAL, MARINE & WATER 55% REST OF NAVAL WO
Slide 11: Target timetable
The Weir Group PLC | Acquisition of SPM Flow Control, Inc. Excellent Engineering Solutions Target timetable Today Announcement of agreement on terms 26 June Class 1 circular posted to shareholders [13] July Shareholder EGM [13] July Completion of transaction 11
Slide 12: Conclusion: Excellent match with key Weir criteria
The Weir Group PLC | Acquisition of SPM Flow Control, Inc. Excellent Engineering Solutions Conclusion: Excellent match with key Weir criteria Adds significantly to Weir’s portfolio of high Potential to enhance productivity through growth, high margin specialist products and application of Weir’s
Slide 13: Financials
The Weir Group PLC | Analyst Acquisition Presentation of SPM Flow Control, Inc. Excellent Engineering Solutions Acquisition of SPM Flow Control Inc. Financials 13
Slide 14: Transaction Details
The Weir Group PLC | Acquisition of SPM Flow Control, Inc. Excellent Engineering Solutions Transaction Details Purchase Consideration $653m • cash / debt free, after expenses • annualised EBIT multiple of 9.0 times • annualised EBITDA multiple of 8.6 times Purchase price payable in cash at compl
Slide 15: SPM Financials
The Weir Group PLC | Acquisition of SPM Flow Control, Inc. Excellent Engineering Solutions SPM Financials Year Year Year 9 Months End End End to Annualised $m June ‘04 June ‘05 June ‘06 March ‘07 March ‘07 Revenue 55.8 78.8 140.6 208.6 278.1 (1) (2) EBITDA 8.6 12.6 35.0 56.6 75.5 (1) (2) Operating p
Slide 16: Pro forma Financials
The Weir Group PLC | Acquisition of SPM Flow Control, Inc. Excellent Engineering Solutions Pro forma Financials Weir £m Group WPL DML SPM Combined Increase Revenue 940.9 (70.5) - 139.8 1010.2 EBITDA 107.8 (6.8) - 37.9 138.9 Operating profit 87.7 (4.2) (8.1) 36.5 111.9 28% Interest (0.6) 2.7 5.2 (19.
Slide 17: Summary
The Weir Group PLC | Acquisition of SPM Flow Control, Inc. Excellent Engineering Solutions Summary Financially attractive Immediate earnings enhancement Annualised post tax ROI 7.2% Pro forma Net Debt / EBITDA 1.5 times Consistent with group strategy Balances end market portfolio and geo
Slide 18: Acquisition of SPM Flow Control Inc.
The Weir Group PLC | Analyst Acquisition Presentation of SPM Flow Control, Inc. Excellent Engineering Solutions Acquisition of SPM Flow Control Inc. 18