Investec has raised its target price for engineering group Weir from 2,020p to 2,100p and reiterated its 'buy' rating for the stock, following Thursday's announcement that it is set to acquire pressure control provider Mathena.

"This acquisition fits in nicely with Seaboard and diversifies Oil & Gas revenues (31% of FY13E sales) away from the pressure pumping market," the broker said.

Investec said that Mathena, purchased for $240m with up to $145m of deferred consideration, looks to have good long-term propsects and "makes Weir a sizable player in surface pressure control equipment and service for the upstream onshore unconventional market."

The broker said it expects to upgrade its 2013 and 2014 adjusted profit before tax forecasts (currently £453m and £474m, respectively) by 3-4% following the acquisition.

The new target price is in line with the estimated earnings upgrade and was set using a global peer average price-to-earnings ratio of 13.4.

Shares were trading 2.59% higher at 1,859p in mid-morning trade.

Bc

Related share prices
Weir Group (WEIR) share price