(Bloomberg)
MRC Global Inc., a pipe and fittings distributor in the cross hairs of activist investor Engine Capital, is exploring a sale, according to people familiar with the matter.
The Houston-based company is working with financial advisers to seek interest from potential buyers, said the people, who asked to not be identified because the details are private. MRC has drawn interest from private equity firms, the people said. No final decision has been made and MRC could opt to remain independent.
Representatives for MRC didn’t respond to requests for comment.
MRC, whose stock had fallen about 17% this year, rose as much as 12% on Monday. The shares closed up 9.7% to $10.59 in New York trading, giving the company a market value of about $890 million. Including debt and preferred equity, the company is valued at $1.8 billion, according to data compiled by Bloomberg.
MRC provides flow-control, measurement and other products to end-markets including the utilities, energy and infrastructure spaces, according to a investor presentation in September.
Engine Capital is urging MRC to explore a sale, saying in its third-quarter investor letter that the stock is undervalued and that the company could benefit from a private buyer less concerned with volatility and mark-to-market risks, Bloomberg News reported this month.
Cornell Capital, a private equity firm that holds all of MRC’s Series A convertible perpetual preferred stock, sued the company this year to prevent it from refinancing a senior-secured term loan, postponing that deal.
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