Flowserve Announces Agreement to Acquire Lawrence Pumps, Inc


Flowserve Corp. announced it has entered into a definitive agreement to acquire Lawrence Pumps, Inc., a privately owned American manufacturer of highly engineered critical service centrifugal pumps used primarily in the petrochemical and oil and gas industries.

The acquisition of Lawrence will provide Flowserve with severe service API and chemical slurry pump technology that is critical to the refining, oil sands, polyolefin and polyethylene industries, which are core markets for Flowserve. The acquisition is expected to close early in the fourth quarter of 2011 and is subject to customary closing conditions, including the receipt of regulatory approval in the U.S.

"Lawrence has consistently been an industry leader in critical slurry services solving complex pumping problems involving solids and high temperatures in our core markets," said Tom Ferguson, president, Flowserve Flow Solutions Group. "The Lawrence brand has an outstanding reputation, and many Lawrence products have proprietary niche applications that strategically complement our industry-leading portfolio. We look forward to leveraging our expansive network of service centers and global sales force to expand the reach of Lawrence products and capture unrealized aftermarket potential as we continue to serve the needs of our customers."

"We are excited to become part of the Flowserve family," said Paul Reddick, president, Lawrence Pumps, Inc. "Flowserve provides Lawrence an industry-leading global platform that will provide us the opportunity to drive future growth and the resources to develop new reliability-enhancing products."

For the fiscal year ended December 31, 2010, Lawrence had revenues of approximately $44 million and EBITDA of approximately $8 million. For 2011, Lawrence estimates having revenues of around $50 million and EBITDA of around $10 million.

Flowserve expects to fund the transaction with cash on hand. Other terms of the acquisition were not announced. Based on initial valuations, the Lawrence acquisition is expected to have a dilutive impact of less than $0.05 on the company s 2011 earnings per share due to transaction costs and non-cash purchase price accounting effects from inventory and backlog revaluation, partially offset by favorable operations impact.

"We are excited about our acquisition of Lawrence, as it reflects our disciplined approach during the current economic environment to use our strong balance sheet to grow Flowserve in a way that meaningfully increases long-term shareholder value," said Mark Blinn, Flowserve president and chief executive officer. "The close strategic fit of Lawrence s highly-engineered products, the meaningful synergies our management team has identified and the transaction size, which enables us to tuck in Lawrence to the global Flowserve platform, combine to make the transaction a good example of our acquisition strategy. We plan to follow this disciplined approach as we evaluate similar shareholder value-creating opportunities that meet both our strategic and financial return objectives."

Lawrence Pumps was formed in 1936 and is headquartered in Lawrence, Mass. With locations in China, India and Singapore, Lawrence specializes in the design, development and manufacture of engineered centrifugal pumps for critical services within the petroleum refining, petrochemical, pulp and paper, and energy markets.

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