McJunkin Red Man Acquires Stainless Pipe And Fittings

HOUSTON, Tex. -- McJunkin Red Man Corporation (MRC) today announced signing an agreement to acquire Stainless Pipe and Fittings Australia Pty Ltd (SPF), as part of its strategic vision to be the world’s premier pipe, valve and fitting (PVF) distribution company to the energy and industrial markets.

HOUSTON, Tex. -- McJunkin Red Man Corporation (MRC) today announced signing an agreement to acquire Stainless Pipe and Fittings Australia Pty Ltd (SPF), as part of its strategic vision to be the world’s premier pipe, valve and fitting (PVF) distribution company to the energy and industrial markets.

Effective as of closing, SPF will operate as MRC SPF. The acquisition will enhance MRC’s global project capabilities. The transaction, which is expected to close by the end of June, is subject to customary closing conditions.

SPF, founded in 1996, is the largest distributor of stainless steel piping products in the southern hemisphere. Headquartered in Perth, Western Australia, SPF has seven locations across Australia as well as Korea, Italy, United Kingdom and United Arab Emirates. SPF is a leading project supply specialist with proven capabilities supplying the Oil and Gas, Mining and Mineral Processing, Chemical and Petrochemical and Water Treatment and Desalination industries. SPF’s 430,000 square feet facility based in Perth would become MRC’s premier pipe, fittings and flange (PFF) stocking and distribution center for Australasia.

This facility is equipped with state-of-the-art materials handling facilities including the ability to facilitate project laydowns and provide bulk supply provisions.

Complementing the Perth facility are two additional stocking locations in Australia as well as strategically placed stockholdings in the Jebel Ali Free Zone, UAE and in the United Kingdom.

Acquiring SPF would increase MRC’s global PFF stockholding in stainless steel to a value in excess of US$50 million, with global stainless PFF sales of more than US$300 million. The US$4 billion MRC group currently has over 400 global service locations and US$850 million of PVF stock located around the globe.

The acquisition would complement MRC’s 2009 purchase of Transmark Fcx (MRC Transmark), the leading valve distributor in the eastern hemisphere. The synergies between SPF and MRC Transmark would create value for both companies providing a complete PVF capability in the eastern hemisphere and supporting MRC’s drive to be the Global Supplier of Choice.

Andrew Lane, Chairman, President and Chief Executive Officer commented, “This acquisition furthers our vision to be the world’s premier PVF distribution company to the energy and industrial markets. SPF’s PFF capabilities would allow MRC to expand on our valve platform to have a complete global PVF supply capability. We are excited to expand our presence in Australia and with major EPC projects globally. We are also very pleased to be adding Graham Yarker and Jeff Nicholas to the MRC management team and all of SPF’s 145 employees to MRC on the closing of this acquisition.”

SPF’s Managing Director Graham Yarker commented “We are very pleased to be joining the MRC team. Our vision to advance SPF to the next level through sustainable growth would be realized with the global presence, scale and strength of the combined company.”Jeff Nicholas SPF’s Managing Director – Sales added “Combined SPF and MRC would create a complete global PVF solution and these synergies would create opportunity and value for the customers of both companies. SPF would expand MRC’s international scope and greatly enhance supply capabilities for projects internationally.”

Headquartered in Houston, Texas, MRC is the largest global distributor of PVF and related products and services to the energy and industrial sectors, based on sales, and supplies these products and services across each of the upstream, midstream and downstream markets.

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