Weir completes LGE sale and major US deal

by ENGINEERING GIANT Weir Group yesterday completed the multi-millionpound sale of Scottish-based LGE Process, while moving to increase its interests in the US shale gas market.

The FTSE-100 firm agreed a deal to offload Edinburgh-based LGE — which designs and builds plant for the marine and onshore sectors to process, store and handle liquid gases — to Babcock International in a deal worth £23 million.

At the same time, the Clydebank based firm confirmed it had a concluded a potential £237m deal, which was first announced last month, to acquire Oklahoma-based Mathena.

Babcock yesterday said LGE would be subsumed into its design services business to create a medium-sized, specialist energy and marine technology unit capable of providing mechanical, electrical and chemical processing equipment for ships, oil and gas platforms and onshore support facilities.

Babcock chief executive Peter Rogers said the acquisition of LGE — which produced gross revenues of £26.3m in 2011 and an operating profits of £3m — was an important move for the firm.

He said: “The acquisition of LGE and its combination with our existing expertise in design services will create a strong business, well positioned to build on its current positions and develop into new commercial marine markets, particularly within the oil and gas market.”

The disposal of LGE came on the same day as Weir completed the purchase of Mathena, a major provider of pressure control rental equipment and services to drilling operations in key unconventional oil and gas basins in the US.

Weir has paid £148m up front for the company, with a maximum further consideration of £88.9m depending on the operation meeting its profits growth targets over the next two years.

Mathena was targeted by Weir as it was seen as a “strong strategic fit” with the company’s existing US operations and Seaboard business.

Picture: Weir Group. Moving ahead: Weir has completed the sale of LGE and the Mathena purchase.