The Woodlands to gain big company via spinoff
The Woodlands will soon be home to a large publicly traded energy services company when industrial equipment manufacturer Dover Corp. completes a planned spinoff of its oil and gas business in the spring.
Tentatively called Wellsite, the new company will combine Dover’s artificial lift — which keeps wells pumping oil and gas — and energy automation divisions with several other of its businesses that manufacture compression equipment, drill bits, winches, bearings, wellhead production equipment and process equipment for petrochemical plants.
Illinois-based Dover already had consolidated most of its oil and gas businesses in office space in The Woodlands in recent years, so placing the headquarters there is a natural move. Dover also has locations for its Norriseal Wellmark and bearings businesses in Houston.
Sivasankaran “Soma” Somasundaram, who leads the artificial lift and
automation divisions that operate under the name Dover Energy, will become the CEO of Wellsite when the spin-off is completed. Wellsite will have about 3,000 employees, including nearly 400 in the Houston area, according to a Dover spokesperson.
Dover has come under pressure from shareholder activists in recent months to shed its energy business, which hurt earnings during the recent oil bust. The spinoff, however, will come as the energy sector continues its slow recovery. Wellsite would have a stock market value of more than $2 billion, said Byron Pope, an energy analyst with the Houston investment banking firm Tudor, Pickering, Holt & Co.
Wellsite immediately becomes one of the country’s bigger oil field equipment manufacturers, Pope said, with a specific strength in artificial lift. The pump jack, known as “a nodding donkey,” is the most ubiquitous type of artificial lift.
Dover Corp. President and CEO Robert Livingston said the deal is an important part of Dover’s transformation into a company with a narrower focus on its core businesses such as industrial electronics, fluids, refrigeration and food equipment.
“The spinoff creates a strong new company poised to excel in the upstream oil and gas markets, with particular strength in U.S. shale basins,” Livingston said in the announcement. “Wellsite has worldclass businesses and is known for its differentiated technology, leading brands and superior customer service.”