CHARLESTON, W.Va. -- McJunkin Red Man, the big supplier of pipes, valves and fittings, has filed a plan to sell $750 million of stock to the public.
The company, co-headquartered in Charleston and Tulsa, Okla., said it plans to list its shares on the New York Stock Exchange under the symbol, "MRC."
McJunkin Red Man, with more $4 billion in annual sales, will become only the second Fortune 500 company with a headquarters in West Virginia. The only other company with that distinction is United Bankshares, Inc., which is co-headquartered in Charleston and Washington, D.C.
Details of the initial public offering are contained in a 490-page prospectus McJunkin Red Man filed Wednesday with the federal Securities and Exchange Commission.
The plan to offer stock to the public is not a surprise. On Dec. 4, 2006, McJunkin Corp. was purchased by an indirect subsidiary of the Goldman Sachs Funds. Shareholders of McJunkin received cash or a combination of cash and units in a company named PVF Holdings Limited Liability Co. PVF is an abbreviation commonly used in the pipe business for pipes, valves and fittings.
The prospectus says affiliates of Goldman, Sachs & Co. own a majority interest in PVF Holdings.
McJunkin Corp. and Red Man Pipe and Supply Co. announced last July they would combine in a merger of equals. Shortly after, McJunkin said an initial public offering was likely "if the capital markets support such an offering."
According to the prospectus, the entity selling the stock - PVF Holdings- will not receive any of the proceeds from the sale of the shares. Rather, PVF Holdings intends to distribute the proceeds to its members, which include certain members of its Board of Directors and senior management team and various affiliates, as well as affiliates of Goldman Sachs & Co.
The principal and selling stockholders include the following beneficial owners: PVF Holdings, The Goldman Sachs Group Inc., Craig Ketchum, James Underhill, David Fox III, Dee Paige, Stephen D. Wehrle, Rhys Best, Henry Cornell, Christopher A.S. Crampton, John Daly, Harry Hornish Jr., Sam Rovit, H.B. Wehrle III and 19 directors and executive officers as a group.
The prospectus says the major owners of PVF Holdings are: The Goldman Sachs Funds, Craig Ketchum, James Underhill, David Fox III, Dee Paige, Stephen D. Wehrle, Jeffrey Lang, Randy Adams, Rory Isaac, Gary Ittner, Dennis Niver, Ken Hayes, Stephen Lake, Rhys Best, Henry Cornell, Christopher A.S. Crampton, John Daly, Harry Hornish Jr., Sam Rovit, H.B. Wehrle III, The Goldman Sachs Funds and its directors and executive officers as a group, and other holders of common units of PVF Holdings.
Following the initial public offering, Goldman Sachs Funds will own 65 percent of McJunkin Red Man and others - including the public - will own 35 percent, according to an organizational chart in the prospectus.
CHARLESTON, W.Va. -- McJunkin Red Man, the big supplier of pipes, valves and fittings, has filed a plan to sell $750 million of stock to the public.
The company, co-headquartered in Charleston and Tulsa, Okla., said it plans to list its shares on the New York Stock Exchange under the symbol, "MRC."
McJunkin Red Man, with more $4 billion in annual sales, will become only the second Fortune 500 company with a headquarters in West Virginia. The only other company with that distinction is United Bankshares, Inc., which is co-headquartered in Charleston and Washington, D.C.
Details of the initial public offering are contained in a 490-page prospectus McJunkin Red Man filed Wednesday with the federal Securities and Exchange Commission.
The plan to offer stock to the public is not a surprise. On Dec. 4, 2006, McJunkin Corp. was purchased by an indirect subsidiary of the Goldman Sachs Funds. Shareholders of McJunkin received cash or a combination of cash and units in a company named PVF Holdings Limited Liability Co. PVF is an abbreviation commonly used in the pipe business for pipes, valves and fittings.
The prospectus says affiliates of Goldman, Sachs & Co. own a majority interest in PVF Holdings.
McJunkin Corp. and Red Man Pipe and Supply Co. announced last July they would combine in a merger of equals. Shortly after, McJunkin said an initial public offering was likely "if the capital markets support such an offering."
According to the prospectus, the entity selling the stock - PVF Holdings- will not receive any of the proceeds from the sale of the shares. Rather, PVF Holdings intends to distribute the proceeds to its members, which include certain members of its Board of Directors and senior management team and various affiliates, as well as affiliates of Goldman Sachs & Co.
The principal and selling stockholders include the following beneficial owners: PVF Holdings, The Goldman Sachs Group Inc., Craig Ketchum, James Underhill, David Fox III, Dee Paige, Stephen D. Wehrle, Rhys Best, Henry Cornell, Christopher A.S. Crampton, John Daly, Harry Hornish Jr., Sam Rovit, H.B. Wehrle III and 19 directors and executive officers as a group.
The prospectus says the major owners of PVF Holdings are: The Goldman Sachs Funds, Craig Ketchum, James Underhill, David Fox III, Dee Paige, Stephen D. Wehrle, Jeffrey Lang, Randy Adams, Rory Isaac, Gary Ittner, Dennis Niver, Ken Hayes, Stephen Lake, Rhys Best, Henry Cornell, Christopher A.S. Crampton, John Daly, Harry Hornish Jr., Sam Rovit, H.B. Wehrle III, The Goldman Sachs Funds and its directors and executive officers as a group, and other holders of common units of PVF Holdings.
Following the initial public offering, Goldman Sachs Funds will own 65 percent of McJunkin Red Man and others - including the public - will own 35 percent, according to an organizational chart in the prospectus.
An exact date for the stock offering has not been set. Neither has a price.
The timing of the offering could be tricky. That's because the stock market has been volatile in recent months. A sub-prime loan mess has unsettled investors, as has a slowdown in the housing industry and, most recently, worries about inflation.
But McJunkin Red Man has been enjoying boom times. The company is the largest North American distributor of pipe, valves and fittings and related products and services to the energy industry, based on sales. The oil and gas industry has been reporting record profits and announcing plans to drill more wells. That means the industry will need more pipe.
McJunkin Red Man has more than 250 branch offices in the most active oil and gas regions in North America. The company offers more than 100,000 products. McJunkin Red Man says in its filing that it provides exceptional service and, as a result, has an average relationship of over 20 years with its top 10 customers.
"We believe the critical role we play in our customers' supply chain, our unmatched scale and extensive product offering, our broad North American geographic presence, our customer-linked scalable information systems and our efficient distribution capabilities serve to solidify our long-standing customer relationships and drive our growth," the company said.
McJunkin Red Man said it plans to make the offering through Goldman, Sachs & Co., Lehman Brothers, JP Morgan, Deutsche Bank Securities, Robert W. Baird & Co., Credit Suisse and Stephens Inc.
Diana Morris, McJunkin Red Man's vice president of investor relations, said today that since the company has filed a prospectus, it is in a so-called "quiet period" and Securities and Exchange Commission regulations prohibit the company from commenting. "All of the information is on the SEC Web site," she said.
To read the prospectus, go to www.sec.gov. Click on "Companies & other Filers." Type in "McJunkin Red Man," then click the "S-1" form. The document may take several minutes to download.
McJunkin Red Man said that as of June 26, it had 3,484 employees worldwide.
The company currently has only one branch office outside North America. However, "we believe that attractive opportunities exist to expand internationally," particularly in West Africa, the Middle East, Europe and South America, McJunkin Red Man said in its filing.
Contact writer George Hohmann at busin...@dailymail.com or 304-348-4836.
