Shawcor to Rebrand and Focus on Leadership in Infrastructure Technology as it Explores Strategic Alternatives for Several Oilfield Businesses
TORONTO, Sept. 12, 2022 (GLOBE NEWSWIRE) — Shawcor Ltd. (“Shawcor” or the “Company”) (TSX: SCL) today announced that it will seek to change its name to Mattr (the “Name Change”). The Name Change is expected to occur during the first half of 2023, conditional on regulatory and shareholder approvals, and it is anticipated that trading of the Company’s common shares will commence under a new ticker symbol. Further details regarding the Name Change, including the effective date of the Name Change and the new ticker symbol of the Company, will be announced over the coming months.
Concurrently, the Company has commenced a review of strategic alternatives for its Pipeline Performance Group (“PPG”), Shaw Pipeline Services (“SPS”) and Oilfield Asset Management (“OAM”) operating units. A range of options are under consideration, including the potential sale of all three operating units. Shawcor’s PPG and SPS operating units currently form the entirety of the Company’s Pipeline & Pipe Services (“PPS”) reporting segment, while the OAM operating unit is a component of the Composites Systems (“CS”) reporting segment.
“The steps announced here are important elements in our ongoing strategy to unlock long-term profitable growth and demonstrate our commitment to continuing the transformation of our Company; by simplifying our portfolio, lowering volatility and elevating full-cycle margins and free cash flow,” said Mike Reeves, President and CEO of Shawcor. “Since early 2020, Shawcor has successfully divested multiple non-core businesses and other assets, generating nearly $200 million of cash proceeds. Once completed, the additional actions shared today will enable Shawcor to tightly focus capital on the core elements of our Composite Systems and Automotive & Industrial segments, businesses which align closely with our materials technology competencies, are best positioned to benefit from favorable long-term macroeconomic trends and consistently offer high returns on invested capital. To many, the Shawcor name is synonymous with pipeline related products or services. As we look to the future, rebranding our Company is an important step to better reflect the energy, creativity and innovation of this organization, and our leadership in providing high value, materials-based products to industrial and critical infrastructure markets.”
“In recent years the Company has taken substantial steps to lower fixed costs across its portfolio, realigning the physical footprint and staff structure of the PPG, SPS and OAM businesses to more appropriately reflect current and projected future activity levels,” added Tom Holloway, CFO of Shawcor. “With these actions completed, a robust multi-year global wellbore and pipeline construction up-cycle well underway, and a substantial backlog of high-quality work secured, we believe the moment is right to realize optimal stakeholder value from a sale or other transaction of these businesses. Proceeds generated by any transactions will be utilized to strengthen the Company’s balance sheet, accelerate the profitable expansion of our higher margin, less volatile Composite Systems and Automotive & Industrial segments and to return capital to shareholders as conditions permit.”
There can be no assurance that one or more sales – or any other transaction – will take place, and no specific timeline has been established for the completion of this strategic alternative review. The Company will seek to maximize shareholder value and minimize impacts to its employees, customers and vendors via the potential sale of PPG, SPS and OAM to buyers that have the financial strength to support execution of each business’s backlog and to facilitate their growth plans. The Company does not intend to disclose developments with respect to the progress of its evaluation of any strategic options until such time as a material development has transpired or disclosure is otherwise deemed required.
PPG is the global leader in development and provision of high value anti-corrosion, flow efficiency, thermal insulation and concrete weight coatings for offshore pipelines, while SPS is the leading provider of non-destructive, ultrasonic and radiographic pipeline girth weld inspection technology and services to the North American onshore and global offshore pipeline markets. OAM is a provider of downhole tubular inspection, repair and inventory management services to the Western Canadian energy market.
The company has retained Goldman Sachs & Co. LLC as its exclusive financial advisor in connection with the strategic review of its PPG business.
Shawcor Ltd. is a growth-oriented, global material sciences company serving the Infrastructure, Energy, and Transportation markets. The Company operates through a network of fixed and mobile manufacturing and service facilities. Its three business segments, Composite Systems, Automotive & Industrial and Pipeline & Pipe Services enable responsible renewal and enhancement of critical infrastructure while lowering risk and environmental impact.
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Forward Looking Information
This news release contains forward-looking information within the meaning of applicable securities laws. Words such as “may”, “will”, “should”, “anticipate”, “plan”, “expect”, “believe”, “predict”, “estimate” or similar terminology are used to identify forward-looking information. This forward-looking information is based on assumptions, estimates and analysis made in the light of the Company’s experience and its perception of trends, current conditions and expected developments, as well as other factors that are believed by the Company to be reasonable and relevant in the circumstances. Forward-looking information involves known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements to be materially different from those predicted, expressed or implied by the forward-looking information. The forward-looking information is provided as of the date of this news release and the Company does not assume any obligation to update or revise the forward-looking information to reflect new events or circumstances, except as required by law.
Source: Shawcor Ltd.