Industry Capsules

Acquisitions, Mergers & Partnerships

Company Transitions to Employee Ownership and Thrives

Doug Beck first learned of employee ownership when his bank recommended it to him as a method of succession for his family company. “I first realized that employee ownership was what I was going to do as I planned for retirement because I don’t have any children to take over the business,” Beck says. “I also wanted to retain the culture and success of the company moving forward without having to worry that a sale to a competitor or other strategic buyer would result in relocating the business, laying off workers or reducing benefits.”

Founded by Beck’s grandfather, Harold Beck & Sons began in Philadelphia with the initial goal of improving temperature control of industrial furnaces and the belief that their automation method could prove more effective than other companies. The business grew exponentially during the 1940s as World War II surged and continued to grow from there. In 1996, Doug Beck joined the company as president and began placing an emphasis on international expansion. Today, the company has 135 employees. Beck electric actuators are used in more than 70 countries and in more than a dozen industries to precisely position valves and dampers. 

Harold Beck & Sons became employee-owned through an Employee Stock Ownership Plan (ESOP) at the end of 2021.

To make the transition, Beck & Sons hired SES ESOP Strategies. Initially, Beck had concerns that transitioning to a 100% ESOP right away would be too difficult. However, working with SES assuaged these concerns and Beck & Sons ultimately did convert to a 100% ESOP all at once.

Since transitioning to the ESOP at the end of 2021, Beck says he has already noticed increased growth, excitement, and engagement within the company. “People really begin to take real ownership in the company and have more enthusiasm,” Beck says.

Beck looks back on the last decade he’s known about employee ownership and wishes he’d have done it sooner. “Employee ownership is something that every business owner should consider,” Beck concludes. “I’m looking forward to more growth and engagement to come.”

ExxonMobil to Acquire Denbury Inc.

Exxon Mobil Corporation (NYSE: XOM) announced it has entered into a definitive agreement to acquire Denbury Inc. (NYSE: DEN), an experienced developer of carbon capture, utilization and storage (CCS) solutions and enhanced oil recovery. The acquisition is an all-stock transaction valued at $4.9 billion, or $89.45 per share based on ExxonMobil’s closing price on July 12, 2023. Under the terms of the agreement, Denbury shareholders will receive 0.84 shares of ExxonMobil for each Denbury share.

• Combined assets and capabilities further accelerate ExxonMobil’s Low Carbon Solutions business and create an even more compelling customer decarbonization proposition
• Leading CCS network underpins ExxonMobil’s commitment to low carbon value chains including CCS, hydrogen, ammonia, biofuels and direct air capture
• Transaction synergies expected to enable more than 100 MTA of emissions reductions over time, driving strong growth and returns

The transaction synergies are expected to drive strong growth and returns for ExxonMobil. The acquisition of Denbury provides ExxonMobil with the largest owned and operated CO₂ pipeline network in the U.S. at 1,300 miles, including nearly 925 miles of CO₂ pipelines in Louisiana, Texas, and Mississippi — located within one of the largest U.S. markets for CO₂ emissions, as well as 10 strategically located onshore sequestration sites. A cost-efficient transportation and storage system accelerates CCS deployment for ExxonMobil and third-party customers over the next decade and underpins multiple low-carbon value chains including CCS, hydrogen, ammonia, biofuels and direct air capture. 

In addition to Denbury’s carbon capture and storage assets, the acquisition includes Gulf Coast and Rocky Mountain oil and natural gas operations. These operations consist of proven reserves totaling over 200 million barrels of oil equivalent, with 47,000 oil-equivalent barrels per day of current production, providing immediate operating cash flow and near-term optionality for CO₂ offtake and execution of the CCS business.

The boards of directors of both companies have unanimously approved the transaction, which is subject to customary regulatory reviews and approvals. It is also subject to approval by Denbury shareholders. The transaction is expected to close in the 4th quarter of 2023. 

Chevron Announces Agreement to Acquire PDC Energy

Chevron Corporation announced that it has entered into a definitive agreement with PDC Energy, Inc. to acquire all of the outstanding shares of PDC in an all-stock transaction valued at $6.3 billion, or $72 per share. Based on Chevron’s closing price on May 19, 2023, and under the terms of the agreement, PDC shareholders will receive 0.4638 shares of Chevron for each PDC share. The total enterprise value, including debt, of the transaction is $7.6 billion.

The acquisition of PDC provides Chevron with high-quality assets expected to deliver higher returns in lower carbon intensity basins in the United States. PDC brings strong free cash flow, low breakeven production and development opportunities adjacent to Chevron’s position in the Denver-Julesburg (DJ) Basin, as well as additional acreage to Chevron’s leading position in the Permian Basin.

“PDC’s attractive and complementary assets strengthen Chevron’s position in key U.S. production basins,” says Chevron Chairman and CEO, Mike Wirth. “This transaction is accretive to all important financial measures and enhances Chevron’s objective to safely deliver higher returns and lower carbon. We look forward to welcoming PDC’s team and shareholders to Chevron and continuing both companies’ focus on safe and reliable operations.”

“The combination with Chevron is a great opportunity for PDC to maximize value for our shareholders. It provides a global portfolio of best-in-class assets,” says Bart Brookman, PDC President and CEO. “I look forward to blending our highly complementary organizations, and I’m excited that PDC’s assets will help propel Chevron toward our shared goal for a lower carbon energy future.”

Circor International Enters Acquisition Deal With KKR

Circor International Inc. (Circor), a provider of mission-critical flow control products and services for the industrial, aerospace and defense markets, has entered into a definitive agreement to be acquired by investment funds managed by KKR, a global investment firm, in an all-cash transaction valued at approximately $1.6 billion, including the assumption of debt.

Under the terms of the agreement, KKR acquires all outstanding shares of Circor common stock for $49 per share in cash, representing a 55% premium to the company’s closing stock price on June 2, 2023.

KKR is making its investment in Circor through its North America Fund XIII. The investment builds on KKR’s experience investing in flow control technologies and aerospace and defense industry suppliers globally, including Ingersoll Rand (formerly known as Gardner Denver), Flow Control Group, Hensoldt and Novaria Group.

The board of directors of Circor has unanimously approved the transaction and recommends that Circor shareholders vote in favor of the transaction. The transaction is expected to close in the fourth quarter of 2023, subject to the receipt of approval from the company’s shareholders and certain required regulatory approvals, as well as the satisfaction of other customary closing conditions. The board has the right to terminate the merger agreement to enter into a superior proposal, subject to the terms and conditions of the merger agreement.

Following the close of the transaction, KKR will support Circor in expanding its equity ownership program to allow all employees to have the opportunity to participate in the benefits of ownership of the company. This strategy is based on the belief that employee engagement is a key driver in building stronger companies. Once the transaction is complete, Circor will be a privately held company wholly owned by KKR’s investment funds and will no longer have its common stock listed on any public market.

New Partnership Formed to Treat and Destroy PFAS from Municipal Water Systems

Ovivo Inc. (“Ovivo”), a global provider of water and wastewater treatment equipment, technologies and systems, announced a new strategic partnership with E2metrix Inc. (“E2metrix” and together with Ovivo, the “Partners”) to develop and commercialize a complete integrated solution to treat and destroy perfluoroalkyl and polyfluoroalkyl substances (“PFAS”), commonly called the forever chemicals, and other emerging contaminants present in water and wastewater. The solution will permanently safeguard public health and provide a viable onsite PFAS destruction option to their customers.

Since December 2021, Ovivo and E2metrix have been exclusively collaborating to develop an onsite commercially viable treatment system to remove and destroy PFAS present in municipal drinking water utilizing an electrochemical oxidation technology at the heart of the integrated solution. The partners are currently piloting a solution in Alabama that has delivered impressive results with up to 99% reduction of PFOS and PFOA and over 85% reduction of total detectable PFAS in the water treated. The integrated solution is not only removing PFAS but is mineralizing these forever chemicals into their elemental parts of carbon and fluorine, returning safe water back to the environment at a full-scale facility.

In conjunction with this exclusive collaboration, Ovivo made a strategic investment and took an equity participation in E2metrix to strengthen the partnership and accelerate the commercial development of the integrated solution. Other pilots to test the solution for numerous applications, such as municipal drinking water, municipal wastewater, industrial wastewater and landfill leachate are currently being investigated to be deployed in the coming months across North America.

E2metrix is a Sherbrooke, Quebec-based technology company that specializes in the design, development, manufacturing, and commercialization of innovative and clean electro-technologies. Their core offering is ECOTHOR, a patented electrotechnology platform for water, wastewater, and industrial water treatment. Over 200 ECOTHOR reactors have been delivered to date to remove a wide range of complex contaminants. The established ECOTHOR reactors have been modified and tailored to optimize onsite PFAS destruction, under the product name ECOTHOR-EOx.

People in the News

Three New Senior Appointments at Val-Matic

Val-Matic Valve & Mfg. Corp. CEO Rob McDonald announced the appointment of Suhas Mahadik to the position of president, and the promotion of Jason Maciejewski to the position of senior VP of sales. The company also welcomed Sandra Diaz as director of planning and forecasting.

Mahadik has been with parent company A.Y. McDonald Industries since July 2022 as director of automation. Maciejewski has been with Val-Matic nearly 13 years and has held a variety of sales roles with increasing responsibility. Diaz began her career in customer service and switched to inventory and supply chain. She has worked in the PPE industry, and gained responsibility with each role.

Eastern Controls Announces Leadership Updates

Eastern Controls, Inc. (ECI), a leading provider of process measurement and control equipment and services, announced the promotion of Kevin Lavelle to general manager and Ted Johnson to vice president ofsales. Lavelle assumes overall responsibility for the strategic direction, growth and operational excellence of Eastern Control. He has extensive experience in sales and leadership, and and deep understanding of the industry. Johnson has spent more than 40 years in the process industry and has developed strong relationships throughout his career.

VDMA Valves Association Elects New Vice Chair; Committee Chair

In early July, the board of directors of the Building Valves Division elected Stefan Gesing, CEO of Dornbracht AG & Co KG, as its new chairman. He also assumes the role of vice chairman of the VDMA Valves Association. Gesing has been CEO at Dornbracht since 2020. Previously, he served as CFO and member of the executive board at Grohe AG and as CFO at Thyssenkrupp Industrial Solutions.