Red Man’s corporate headquarters in Tulsa, Okla., and McJunkin’s in Charleston, W.V., will serve as co-headquarters for the new company. Red Man Pipe & Supply Co. President & CEO Craig Ketchum and McJunkin Corp. CEO and President H.B. “Bernie” Wehrle, III will serve as co-chief executive officers for the new company. As of today, titles and responsibilities were still being ironed out for other key executives.

Goldman Sachs Capital Partners (GSCP), which in January 2007 became a substantial investor in McJunkin, played a major role in driving the merger. It is widely viewed as a prelude to a public offering by the two privately held companies, although no timetable has been advanced.

“This combination is exciting news for all of our stakeholders including employees, customers, suppliers, and shareholders,” said Wehrle. “We will bring together the solid reputations and financial strengths of both companies and, our most important asset, the loyalty and experience of our new combined workforce.”

“It is an exciting time for Red Man with great opportunities in today’s energy business,” commented Ketchum. “This combination will give us more geographic locations, expanded service capabilities for our customers and increased growth potential, as well as presenting professional opportunities for our combined team members.”

The merger, which is expected to close within 60 days, is subject to customary closing conditions, including regulatory approvals. Additional terms of the transaction were not disclosed.

Although the two companies operate around 200 branches combined, closings and mergers are expected to be minimal. Red Man Vice President/Sales & Marketing Randy Adams told Supply House Times that only about 15 of its branches overlap in location, and some of them service different customers, contracts and markets. He identified 14 different markets served by the combined companies. Red Man’s strength is in supplying “upstream” oil country drilling and production operations, while McJunkin is stronger in the industrial PVF “downstream” side.

No layoffs are expected as a result of the merger. “We are in an industry very strapped for personnel, so there has not been a lot of talk of cutting back. Goldman Sachs made it very clear that they viewed this as a growth acquisition,” said Adams.

He indicated that despite the dual management structure, the companies will operate as a single entity under a common board of directors. Its makeup has yet to be determined but likely will include the board chairs of the respective companies, other family owners and Goldman Sachs personnel. Operations and computer systems will be merged over time, although that is expected to be a long process.

The exact name of the new company had not been determined as of this writing, although it appears it will be some derivative of McJunkin-Red Man, with McJunkin’s name coming first. That was determined based on the closing number of the Dow Jones Industrial Average on Friday, July 13, 2007, the end of the week in which the deal was announced. Merger partners agreed that if the last DJIA decimal on that date ended in an even number, Red Man’s name would take precedence. If an odd number showed up at the end of that day’s trading, McJunkin would go first. McJunkin finished in front by virtue of the Dow’s then record close of 13,907.25 on that date.

Red Man Pipe & Supply Co., headquartered in Tulsa, Okla., was founded in 1977 as a distributor of oilfield and industrial supplies to the oil and gas, petrochemical, refining, pipeline, transmission, utility and chemical industries. Red Man was named Supply House Times magazine’s “Wholesaler of the Year” for 2006, and detailed information about its operations can be found in the December 2006 issue.

Founded in 1921, McJunkin Corp. is headquartered in Charleston, W.V., and distributes industrial PVF and other products to a wide variety of industries including oil and gas exploration, refining, chemical and petrochemical, power generation steel manufacturing and others.

Although the deal must pass federal government approval, nobody anticipates antitrust obstacles. Despite their huge size by PVF industry standards, the markets served by Red Man and McJunkin are so fragmented even the combined companies are unlikely to command a dominant share in any sector.