Since Precision Drilling Trust
Looking back on our past coverage of NATCO, we've really had nothing but nice things to say about the Houston shop.
My colleague David Lee Smith first highlighted the firm in his energy services starter kit back in 2006, pointing to the importance of its carbon dioxide removal equipment. NATCO now becomes the second out of Dave's trio to be snapped up, following Hydril's acquisition by Tenaris
I personally took a shine to the firm in 2007, when I noticed the management eating its own cooking. The board instituted some stock ownership rules that I only wish suboptimally governed firms like Acergy would adopt.
By the fall of 2008, even though NATCO's bookings were still looking strong, the shares were absolutely crushed. I highlighted the firm as a potential takeover target for oilfield services sponge National Oilwell Varco
The pairing makes for a strong strategic fit. Cameron already works in the separation area, thanks to its acquisition of Petreco back in 2004. The firm mostly outsources its equipment needs, so picking up NATCO will help to fill in its supply chain, and ought to enhance project delivery and service quality for its separation customers. Further, control of this leading-edge membrane separation technology should help Cameron pull ahead of the pack and win some handsome contracts, such as the $87 million award NATCO scored from Malaysia's Petronas a few months back.
As a stand-alone, NATCO Group was a great way to play the growing complexity of oil & gas production. Cameron is a fine company, and may be well worth holding onto, but for those exiting shareholders looking to redeploy their funds into a similarly themed small cap, I would point them toward Core Laboratories
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