NEW YORK Japanese trading firm Marubeni-Itochu Steel Inc. (MISI) has reached an agreement to buy U.S. oil country tubular goods (OCTG) distributor Sooner Inc. for $600 million.
Subsidiary Marubeni-Itochu Tubulars America Inc. will acquire 100 percent of Houston-based Sooner from parent company Oil States International Inc.
"Through the acquisition of Sooner, (which) has the largest customer base, strong mill sources and service network in the United States, MISI will expand (its) OCTG business in the U.S., responding to growing demand, largely contributed by shale oil and gas development, and further enhance its capability as a total tubular management service provider through its global network," said Tokyo-based MISI, a joint venture between Japanese trading houses Marubeni Corp. and Itochu Corp.
Sooner, which has six sales offices and five distribution centers in Arkansas, Louisiana, Oklahoma, Pennsylvania and Texas, recorded sales of about $1.8 billion in 2012.
MISI estimates domestic OCTG demand at about 5.5 million tons annually, accounting for about 40 percent of estimated global consumption of 14 million tons.
In addition to distribution, Sooner provides inventory management, third-party inspection, remediation and threading services, according to Oil States, which intends to use the net proceeds to repay outstanding debt and for general corporate purposes, including share repurchases.
"Sooner ... has earned a stellar reputation over its 75 years of operation. Given Marubeni-Itochus global presence, industry expertise and long-term relationship with Oil States as both a supplier and partner, we are confident this is an excellent strategic fit for the Sooner franchise," Oil States president and chief executive officer Cindy B. Taylor said in a statement.