Press Release

DBRS Morningstar Places All Ratings of Shawcor Ltd., Including Issuer Rating of BB (low), Under Review with Positive Implications After Announced Sale of Part of Its PPG Business Segment

August 29, 2023

DBRS Limited (DBRS Morningstar) placed the Issuer Rating and Senior Unsecured Notes rating of Shawcor Ltd. (now doing business as Mattr or the Company) Under Review with Positive Implications following the Company’s announcement that it has signed a definitive agreement to sell a substantial part of its pipe coating division (Pipeline Performance Group or PPG) to Tenaris for USD 166 million (approximately $220 million; the Transaction). The Transaction is subject to customary conditions and regulatory approvals and is expected to be completed within approximately six months.

The Transaction will include the Company’s wholly owned operations in Canada, the U.S., Mexico, Norway, the United Arab Emirates, and Indonesia; several mobile concrete coating plants; its joint-venture interest in Azerbaijan; its research and development capabilities in Toronto and Norway; and a broad portfolio of intellectual property. The Transaction excludes PPG businesses in Malaysia, Italy, the UK, and Brazil, which Mattr remains committed to exit from at a later date. DBRS Morningstar estimates that subsequent to the closing of the Transaction, the Company’s annual revenues to be approximately $1 billion with adjusted EBITDA above $150 million, respectively.

The Under Review with Positive Implications status reflects DBRS Morningstar’s view that Mattr’s business risk profile should benefit substantially from increased earnings stability, given the relatively higher earnings volatility associated with the pipe coating division, and higher full-cycle margins, leading to an overall improved credit risk profile. Furthermore, the Transaction should provide the Company with more financial flexibility to improve its liquidity position and/or reinvest funds to strengthen its existing businesses.

In its review, DBRS Morningstar will focus on (1) assessing the improved business risk profile of the Company; (2) Mattr’s continued operational execution and updated financial risk profile following the Transaction, including the future free cash flow generation capacity; (3) the Company’s longer-term business strategy and financial management intentions; and (4) any resulting implications for the Recovery Rating on the Senior Unsecured Debt.

DBRS Morningstar expects to resolve the Under Review with Positive Implications status upon the close of the Transaction. That said, assuming the Transaction closes as planned and/or the Company continues to execute solidly, DBRS Morningstar is likely to upgrade Mattr’s Issuer Rating by at least one notch on close.

There were no Environmental/Social/Governance (ESG) factors that had a significant or relevant effect on the credit analysis.

A description of how DBRS Morningstar considers ESG factors within the DBRS Morningstar analytical framework can be found in the DBRS Morningstar Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings at (July 4, 2023).

All figures are in Canadian dollars unless otherwise noted.

DBRS Morningstar applied the following principal methodology:
-- Global Methodology for Rating Companies in the Industrial Products Industry (; February 14, 2023)

The following methodologies have also been applied:
-- DBRS Morningstar Global Criteria: Recovery Ratings for Non-Investment-Grade Corporate Issuers (; September 1, 2022)
-- DBRS Morningstar Global Criteria: Guarantees and Other Forms of Support
(; March 28, 2023)
-- Global Methodology for Rating Companies in the Oil and Gas and Oilfield Services Industries (; August 16, 2023)

The credit rating methodologies used in the analysis of this transaction can be found at:

A description of how DBRS Morningstar analyzes corporate finance transactions and how the methodologies are collectively applied can be found at:

The related regulatory disclosures pursuant to the National Instrument 25-101 Designated Rating Organizations are hereby incorporated by reference and can be found by clicking on the link under Related Documents or by contacting us at [email protected].

The credit rating was initiated at the request of the rated entity.

The rated entity or its related entities did participate in the credit rating process for this credit rating action.

DBRS Morningstar had/did not have access to the accounts, management, and other relevant internal documents of the rated entity or its related entities in connection with this credit rating action.

This is a solicited credit rating.

The conditions that lead to the assignment of a Negative or Positive trend are generally resolved within a 12-month period. DBRS Morningstar trends and ratings are under regular surveillance.

Information regarding DBRS Morningstar ratings, including definitions, policies, and methodologies, is available on or contact us at [email protected].

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