Vallourec SA VLOWY, a French tubular solutions provider, has announced that it will acquire 100% shares of Thermotite do Brasil, a subsidiary of Mattr, for $17.5 million. Thermotite specializes in providing thermal insulation coating for pipes used in the offshore oil and gas industry.  

The acquisition price is contingent upon customary price adjustments, including working capital. The transaction is expected to take place on a cash-free and debt-free basis, which means no cash or debt will be included at the time of the deal’s closure. However, it is subject to customary closing conditions, including regulatory approvals.

Thermotite has its facility within Vallourec’s coating services site in Serra, Esperito Santo State. The acquisition also supports the company’s broader business strategy. It should solidify VLOWY’s position within the oil and gas industry and expand its presence in the industry value chain.

Integrating Thermotite’s facilities into Vallourec’s portfolio should provide the latter with an integrated setup that will likely increase its operational efficiency. Moreover, the acquisition should provide Vallourec with valuable technical expertise, particularly in offshore and deepwater markets.

Vallourec’s Strategy

The acquisition aligns with the company’s strategy to provide integrated solutions for complex offshore projects. By incorporating Thermotite’s expertise in coating solutions, Vallourec should be able to enhance its existing portfolio of anti-corrosion coatings for pipes.

VLOWY also highlights that the acquisition should enable it to offer better, more customized pipeline solutions to its customer base. The company is expanding its footprint in Brazil, which is a key growth market in the offshore energy industry. This positions Vallourec to capitalize on the growing demand for high-quality tubular solutions in domestic as well as export markets.

VLOWY’s Zacks Rank and Key Picks

Currently, VLOWY carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the energy sector are PEDEVCO Corp. PED, TechnipFMC FTI and VAALCO Energy EGY. PEDEVCO presently sports a Zacks Rank #1 (Strong Buy), while TechnipFMC and VAALCO Energy carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.

PEDEVCO is engaged in the acquisition and development of energy assets in the United States and Pacific Rim countries. The company stands to benefit significantly from its holdings in the Permian Basin, one of the most prolific oil-producing regions in the United States, as well as in the D-J Basin in Colorado, which includes more than 150 high-quality drilling locations. Combined with bullish oil prices, this is expected to boost the company's production and overall profitability.

TechnipFMC is a leading manufacturer and supplier of products, services and fully integrated technology solutions for the energy industry. The company’s total backlog witnessed a record high of $13.9 million in the second quarter of 2024, indicating a year-over-year increase of 4.51%. This growing backlog ensures strong revenue growth for FTI in the future.

VAALCO Energyis an independent energy company involved in upstream business operationswith a diversified presence in Africa and Canada. Having a large inventory of drilling locations in premium Canadian Acreage, the company’s production outlook seems bright.

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