HOUSTON - MRC Global Inc. (NYSE: NYSE:MRC), a global distributor of pipe, valves, and fitting (PVF) products, has secured a significant agreement with ExxonMobil (NYSE:XOM) to become the primary PVF supplier for the oil giant's North American operations. The deal, announced today, encompasses ExxonMobil's upstream and downstream facilities across the continent, covering both maintenance, repair, operations (MRO) and project-related needs.
Rob Saltiel, President and CEO of MRC Global, expressed the company's pride in extending its over 35-year relationship with ExxonMobil, reinforcing its commitment to support the oil corporation's growth with a comprehensive range of PVF products and services. John Rudisill, Head of Procurement Global Upstream for ExxonMobil, highlighted the strategic value of partnering with MRC Global, citing their expansive product and service offerings, technical expertise, and extensive geographic coverage as key factors in the decision.
The agreement aims to streamline and standardize ExxonMobil's PVF supply chain, leveraging economies of scale within its expanding North American business. This move is set to enhance operational efficiency for ExxonMobil by consolidating its supply chain management under MRC Global's expertise.
MRC Global, with headquarters in Houston, Texas, stands as a prominent player in the distribution of infrastructure products and services, catering to diverse markets such as gas utilities, downstream and industrial sectors, and energy transition initiatives. The company boasts a century-long history of providing innovative supply chain solutions and technical product knowledge through a global network of 214 locations, including specialized valve and engineering centers.
The distributor's comprehensive quality assurance program, offering over 300,000 stock-keeping units from more than 8,500 suppliers, aims to simplify the supply chain processes for its approximately 10,000 customers worldwide.
The financial terms of the agreement were not disclosed in the announcement. This news is based on a press release statement from MRC Global.
InvestingPro Insights
MRC Global Inc. (NYSE: MRC) has recently made headlines with its substantial agreement to supply ExxonMobil's North American operations with pipe, valves, and fitting products. As investors consider the potential impact of this deal on the company's financial performance, InvestingPro provides valuable insights into MRC Global's current market position and future outlook.
According to InvestingPro data, MRC Global boasts a market capitalization of $1.08 billion, reflecting the company's significant presence within the industry. Despite experiencing a revenue decline of 4.93% over the last twelve months as of Q1 2024, the company maintains a healthy gross profit margin of 20.22%, indicating its ability to manage costs effectively. Furthermore, MRC Global operates with a moderate level of debt, which could provide it with the financial flexibility to navigate market fluctuations and invest in growth opportunities.
Investors might also take note of two key InvestingPro Tips. Firstly, MRC Global's valuation implies a strong free cash flow yield, potentially signaling an attractive investment opportunity for those focused on cash generation efficiency. Secondly, the company has been recognized for its high shareholder yield, which is an important factor for investors seeking returns through both dividends and share repurchases.
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This strategic partnership with ExxonMobil reinforces MRC Global's position in the market and highlights its capability to secure major contracts within the industry, which could be a harbinger of future growth and profitability.
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