DNOW to acquire MRC Global in $1.5 billion all-stock transaction

HOUSTON - DNOW Inc. (NYSE:DNOW) announced Thursday it will acquire MRC Global Inc. (NYSE:MRC) in an all-stock transaction valued at approximately $1.5 billion, including MRC Global’s net debt. MRC Global, currently valued at $1.14 billion in market capitalization, has maintained strong financial health with an InvestingPro overall score of 2.71 (GOOD).

Under the agreement, MRC Global shareholders will receive 0.9489 shares of DNOW common stock for each MRC Global share, representing an 8.5% premium to MRC Global’s 30-day volume weighted average price as of June 25. The combined entity will have an enterprise value of approximately $3 billion, with current DNOW and MRC Global shareholders owning approximately 56.5% and 43.5% of the company, respectively. MRC Global brings substantial value to the deal with $2.95 billion in revenue and $154 million in EBITDA over the last twelve months.

The merger brings together two energy and industrial infrastructure organizations with complementary product portfolios and an expanded footprint of more than 350 service and distribution locations across over 20 countries. The combined company will maintain the DNOW name and continue trading on the NYSE under the DNOW ticker, while preserving both brands.

DNOW President and CEO David Cherechinsky will lead the combined company, which will remain headquartered in Houston. The board will expand from eight to ten directors to include two of MRC Global’s current independent board members.

The companies expect to generate $70 million in annual cost synergies within three years following closing through reductions in public company costs, corporate and IT systems, and operational efficiencies. The transaction is anticipated to be accretive to adjusted earnings per share in the first year after closing.

Following completion, the combined company expects to maintain a strong balance sheet with net leverage under 0.5x and achieve a net cash position by the end of the first year post-closing.

The transaction, unanimously approved by both companies’ boards of directors, is expected to close in the fourth quarter of 2025, subject to shareholder approvals and regulatory clearances. According to InvestingPro data, MRC Global’s strong current ratio of 1.68 indicates solid short-term financial stability, while analysts maintain a "Strong Buy" consensus with price targets ranging from $14 to $16. Get deeper insights into both companies with InvestingPro’s comprehensive research reports, available for over 1,400 US stocks.

According to the press release statement, the merger aims to create a premier energy and industrial solutions provider with a diversified customer base across upstream, midstream, downstream, gas utility and industrial sectors.

In other recent news, MRC Global Inc. announced its financial results for the first quarter of 2025, reporting a miss on earnings expectations. The company posted earnings per share of $0.14, which was below the forecasted $0.22, and revenue of $712 million, falling short of the anticipated $763.93 million. MRC Global also launched a joint venture, MTech Services, and initiated a $125 million share repurchase program. Additionally, the company held its annual stockholders meeting, where several directors were elected, and key proposals were approved, including an advisory vote on executive compensation. The appointment of Ernst & Young LLP as the independent auditor for the fiscal year ending December 31, 2025, was ratified. In terms of analyst actions, there were no specific upgrades or downgrades mentioned. MRC Global expects Q2 revenue growth in the high single to low double digits and maintains its full-year guidance for low to high single-digit revenue growth. The company is also targeting over $100 million in operating cash flow for 2025.

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