DNOW and MRC Global sent shockwaves across the energy and industrial supplies sectors on June 26, co-announcing their planned combination that is set to create pipe, valves and fittings powerhouse.

The two Houston-based distributors said they’ve agreed to a merger agreement valued at about $1.5 billion in which DNOW will acquire MRC and result in a combined company that has an enterprise value of approximately $3.0 billion.

Both companies have long been leaders in supplying PVF products, complemented by MRO and safety. Where they differ in product mix is DNOW’s offering of pumps & production and electrical supplies, while MRC also brings gas products and mill tool supplies to the table.

In the Store: MDM’s U.S. MRO Market Trends Report 

Terms of the deal — unanimously approved by both company’s board of directors — include MRC shareholders receiving 0.9489 shares of DNOW common stock for each share of MRC stock, representing an 8.5% premium to MRC’s 30-day volume weighted average price as of June 25. The transaction is expected to close in 2025’s fourth quarter, at which point DNOW and MRC shareholders will own approximately 56.5% and 43.5% of the company, respectively.

Upon completion, DNOW President and CEO David Cherechinsky will remain in those roles for the combined company, while DNOW CFO Mark Johnson will do the same. DNOW’s board will expand from eight to 10 directors, adding two from MRC’s current independent board, while Dick Alario will continue as board chairman.

“The combination of DNOW and MRC Global will create a premier energy and industrial solutions provider with a balanced portfolio of businesses and a diversified customer base fortifying long-term profitability and cash flow generation,” Cherechinsky said in a news release. “MRC Global’s differentiated product offerings and complementary assets strengthen DNOW’s 160-year legacy as a worldwide supplier of energy and industrial products and packaged, engineered process and production equipment.”

MDM’s 1Q25 M&A Report (store link) 

Here’s a glance at what the new DNOW will look like and what both companies expect the combination to result in:

• Combined 2024 revenues of approximately $5.3 billion ($2.9B for MRC and $2.4B for DNOW). About 82% of that revenue is in the United States (245 total locations; 4% from Canada (40 locations) and 14% from international (80 locations).
• MRC and DNOW were respectively Nos. 11 and 13 on MDM’s 2025 Top Distributors List for Industrial Supplies and Nos. 3 and 4 for Industrial PVF. DNOW was also No. 5 for Fluid Power and No. 20 for MRO.
• $364 million in combined EBITDA ($183M on 7.6% margin for DNOW and $181M on 6.1% margin for MRC)
• 5,100 combined employees (2,600 for DNOW and 2,500 for MRC)
• A footprint of more than 350 service and distribution locations (197 for MRC and 165 for DNOW) across 20+ countries, serving a mix of customers in the energy and industrial sectors across upstream, midstream, downstream, gas utility and industrial customers. This includes 235 service locations and 10 distribution/super centers
• The new DNOW will have a “core” plan to serve a broader mix of customers in the construction and maintenance of essential energy process, production and transmission infrastructure, along with enhanced opportunities in alternative energy, AI infrastructure, electrification, mining and other industrial markets
• They expect to generate $70 million of annual cost synergies within three years of closing through public company costs, corporate and IT systems and operational and supply chain efficiencies
• Substantial cash flow generation from organic investments and continued strategic acquisitions
• A balance sheet that includes over $200 million of cash and a $500 million revolving credit facility, and DNOW has secured commitments to expand that credit facility by $250 million at deal close
• The combined company will do business as DNOW and trade as DNOW on the New York Stock Exchange, but both brands will continue following deal close and remain headquartered in Houston

“Bringing our two companies together advances our shared goal of becoming a premier choice for energy, gas utility and industrial customers seeking exceptional service and solutions for the largest and most complex industry needs,” MRC President and CEO Rob Saltiel added. “The transaction diversifies our product offerings for our customers and de-risks our business. DNOW’s long-standing reputation, robust capabilities and broad global presence make it the ideal partner for MRC Global, as our two great companies continue to grow and compete in an expanding global market. Importantly, we have aligned corporate values and a shared commitment to delighting our customers through operational excellence and a culture of outstanding service.”

Other notes and context for this pending deal:

• Goldman Sachs is DNOW’s exclusive financial advisor for the deal and has committed financing, and Kirkland Ellis is serving as legal advisor. J.P. Morgan Securities is MRC’s exclusive financial advisor, with Akin Gump Strauss Hauer & Feld serving as legal advisor.
• DNOW was formed in 2014 via a spin-off from National Oilwell Varco. It had done business primarily as DistributionNOW before rebranding in January 2024. MRC Global’s roots date back to 1921 as McJunkin Supply Company. It combined with Red Man Pipe & Supply in 2006 and was known as McJunkin Red Man before rebanding as MRC in 2015.
• Cherichinsky has been DNOW’s President and CEO since mid-2020, while Saltiel has led MRC in those roles since March 2021
• DNOW’s 1Q25 sales increased 6% year-over-year, helped by five bolt-on acquisitions completed in 2024, while gross margin of 23.2% increased 30 basis points and net profit edged higher. It’s full year 2024 sales increased 2.2% annually. Meanwhile, MRC’s 1Q25 sales were down 8% YoY — continuing a longer trend — and gross margin of 19.9% was down 60 bps. MRC’s 2024 annual sales were down 8.4%.