Westinghouse Electric Co. is dipping a toe into oil and gas. The Cranberry-based nuclear giant announced plans Wednesday to purchase an Italian manufacturer of both nuclear reactor parts and oil and gas equipment.
And the nuclear piece of the acquisition isn’t the most important. “Of primary interest to Westinghouse is expanding into the oil and gas market,” the company said in a statement.
Mangiarotti SpA, an 80-year-old Italian manufacturer and a longtime Westinghouse supplier, makes pressure vessels, heat exchangers and tanks that go into nuclear power plants, petrochemical facilities, and oil and gas processing plants.
After the deal closes, which is expected to happen in August, Westinghouse will keep two of Mangiarotti’s three plants in Italy open. One will remain devoted mostly to nuclear parts production while the other focuses on oil and gas.
Richard Gabbianelli, Westinghouse’s senior vice president for global strategy and operations support, said the relatively abbreviated oil and gas product cycle will help level out the longer lead times on nuclear items.
The components are very similar, but the “time through the shop” tends to be longer for nuclear parts. “It helps balance the workload,” Mr. Gabbianelli said.
“If you had only one, it could be a bit lumpy,” he said.
Plus, “There are a lot of opportunities in the oil and gas business for this equipment,” he said.
Westinghouse did not disclose the value of the deal.
For years, Mangiarotti has been in financial trouble. In 2012, according to the latest data available, it lost 15 million euros (about $20 million at the time), widening the loss from 713,858 euros in 2011.
“They haven’t exactly been a financial superstar,” Mr. Gabbianelli said. The restructuring will involve some layoffs, he said, but he declined to talk specifics until the deal closes.
While the acquisition marks Westinghouse’s first step into oil and gas, Mr. Gabbianelli said the Cranberry company is still distinctly a nuclear firm with no plans to shift its basic business model.
Westinghouse is continually evaluating “our strategy into areas that are adjacent in the energy field,” he said. Any more such moves would depend on specific business opportunities, not wholesale shifts in purpose, he said.
Anya Litvak: firstname.lastname@example.org or 412-263-1455.