BURLINGTON, Mass. -- CIRCOR International, Inc. announced that on June 5, 2020 its subsidiary, CIRCOR Energy Products LLC (CEP), signed a definitive agreement to dispose of its loss-making short-cycle upstream oil and gas business, Distributed Valves, to MS Valves GmbH for negative $8.25 million.
The transaction is subject to a working capital adjustment and an earnout of 50 percent of net profit from closing through December 31, 2022. As part of the transaction, CEP will retain certain supplier liabilities and responsibility for closing the Mexico manufacturing facility. The transaction is expected to close in June 2020, subject to customary closing conditions.
“The sale of our Distributed Valves business is consistent with our strategy to diversify away from non-core businesses and focus on more attractive end markets,” said Scott Buckhout, President and Chief Executive Officer of CIRCOR. “We remain focused on executing our strategy and will continue to take steps that enhance value for our shareholders.”
Distributed Valves manufactures ball valves primarily used in the U.S. upstream oil and gas market. The cash operating losses attributable to the Distributed Valves business are expected to be approximately $16 million year-to-date through June 2020.
In connection with the disposition of the Distributed Valves business, CIRCOR also announced that Lane Walker, President of CIRCOR’s Energy Group, departed from CIRCOR on June 8, 2020.
“On behalf of the Board of Directors and everyone at CIRCOR, I want to thank Lane for his leadership over the years and for helping us exit upstream oil and gas,” said Mr. Buckhout. “We wish him the best in his future endeavors.”