MRC Global Little Changed After Pricing IPO at Lower End

MRC Global Inc. (MRC), the energy products and services company owned by Goldman Sachs Group Inc. (GS), was little changed in its first day of trading after going public at the low end of the proposed price range.

The stock gained less than 1 percent to close at $21.04 in New York, after earlier dropping as much as 6 percent to $19.75. MRC and Goldman Sachs sold 22.73 million shares at $21 each to raise $477.3 million in an initial public offering, according to a statement yesterday, after earlier offering them for $21 to $23.

The sale price valued the Houston-based company at $2.13 billion. Purchased by the New York-based bank five years ago, MRC dubs itself the largest global distributor of pipe, valves and fittings to the energy industry by sales. Goldman Sachs will hold about 77 percent of MRC after the IPO, according to the prospectus.

MRC generated almost $5 billion in sales last year serving areas including the Marcellus and Eagle Ford shale formations in the U.S. New techniques for smashing open oilfields more than a mile underground enabled drillers to lift U.S. oil production to a 9-year high in 2011, Energy Department figures showed. Natural-gas output also soared, thanks to the same revolution in drilling technology, touching an all-time high last year.

In North America, which accounts for 87 percent of the global market for hydraulic fracturing, spending on so-called fracking is expected to reach $30 billion this year, according to Tulsa, Oklahoma-based Spears & Associates Inc.

MRC will use the sale proceeds to repay debt, the prospectus shows. Goldman Sachs planned to offer 5.7 million shares, while MRC, led by Chief Executive Officer Andrew Lane, planned to sell the rest.

The shares are listed on the New York Stock Exchange under the symbol MRC. Goldman Sachs and Barclays Plc (BARC) led the offering. The company’s predecessor, McJunkin Red Man Holding Corp., filed for a $750 million IPO in 2008 and later withdrew the proposal.

To contact the reporter on this story: Lee Spears in New York at lspears3@bloomberg.net

To contact the editor responsible for this story: Jennifer Sondag at jsondag@bloomberg.net

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