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JPMorgan Partners, Candover and 3i finalize agreement to acquire part of ABB's Oil & Gas business for $925MJan. 16, 2004 -- A private equity syndicate comprising of JPMorgan Partners, Candover, a leader provider of equity for European buyouts, and 3i, Europe's leading venture capital company, announced today that a company formed by them has signed a Sale & Purchase Agreement to acquire part of the Oil & Gas business of ABB, the Swiss-Swedish engineering group, for a total of US$925 million, with a potential deferred consideration of an additional amount of up to US $50 million. The sale comprises ABB Vetco Gray, including ABB's Oil & Gas business in Brazil, and ABB Offshore Systems, including ABB's International Oil & Gas Modification and Maintenance business. The acquisition is subject to satisfactory completion and disposition of compliance matters under review. Candover, 3i and JPMorgan Partners have a proven track record of investing in the oilfield services sector, and together with co-investors NIB Capital and Vetco International's senior management, will commit a total of US $420 million of equity. Debt and mezzanine financing of approximately US $653 million is being provided by a syndicate of banks led by JPMorgan, Bank of Scotland and CSFB. The equity syndicate is backing a proven incumbent management team and will be appointing a new Executive Chairman and Deputy Chairman. Upon closing, John Kennedy will become Executive Chairman and Paul Loyd will become Deputy Chairman. Kennedy and Loyd each have over 30 years sector experience. Kennedy is currently Chairman of Wellstream International Ltd., and was formerly Executive Vice President of Halliburton. Loyd was formerly Chairman and CEO of R&B Falcon Corporation, the world's largest and most diversified offshore drilling company. Vetco International will be a major global participant in the oilfield services sector and will provide a portfolio of hi-tech proprietary products and services. It routinely serves all the major international oil companies, national oil companies, as well as independent oil producers throughout the world. Vetco International will comprise two major subsidiaries: Vetco Gray and Offshore Systems. The Group manufactures drilling and production equipment installed on drilling rigs and production platforms and designs and manages the installation of subsea production systems. It also undertakes modification and maintenance work on existing offshore installation and constructs new build fixed and floating production facilities. In 2002, the Group reported turnover of $1.72bn with 7,500 employees across 31 countries. ABB Lummus Global, also part of ABB's Oil, Gas and Petrochemicals Division, is not included in the acquisition. Commenting on the acquisition, John Kennedy said, "The great attraction of ABB's Upstream Oil & Gas business is the experience and commitment of the people, augmented by world-class brands such as Vetco Gray and Offshore Systems. Over recent years, they have achieved industry leadership through technological innovation and application, which has won them the active support of the major oil and gas companies." "Under the new ownership, it is our intention to nurture and develop this technological focus and continue to grow the business in Vetco International's regional and global marketplaces," said Paul Loyd. Commenting on the acquisition, John Arney, Director at Candover, said "Candover first approached ABB almost two years ago with a view to acquiring the Oil & Gas business as part of our strategic intent to build a significant presence in the upstream oilfield services sector. We are acquiring a market-leading business with global scale, at a time when strong growth is predicted for the industry. We are also backing an impressive incumbent management team, augmented by the appointments of John Kennedy as Executive Chairman and Paul Loyd as Deputy Chairman. Management's strategy is to harness Vetco International's world class brands and technology to better serve the impressive global customer base and establish the Group as a significant, independent player in the oil field services sector." Graeme Sword, Director of Oil & Gas, 3i Group plc commented, "We have twenty years experience investing in Oil & Gas and over 40 investments in our portfolio making us one of the most qualified and active investors in this sector. It was this knowledge which helped identify the strengths of the target companies and will provide them with the support to prosper as world class brands. This deal is a significant transaction within the Oil & Gas services sector that has seen little M&A. The combination of new owners, a new chairman and access to private equity capital makes this a very exciting time for everybody associated with Vetco International." "This is a global deal that will capitalize on JPMorgan Partners' extensive experience in the oil and gas industry and allow us to apply our expertise both in Europe and the United States to help grow and develop this company's technology and business strengths. We look forward to helping the company capitalize on its core brands and strong reputation by partnering with management and creating greater operating efficiencies." said Arnie Chavkin, Chief Investment Officer of JPMorgan Partners. *This information is not intended as an offer or solicitation for the purpose or sale of any financial instrument. JPMorgan Partners, LLC is a Registered Investment Adviser with Securities and Exchange Commission ("SEC"). 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The historical information presented may reflect the activities of the professionals of CCMP Capital Advisors, LLC (together with its affiliates, “CCMP Capital”) while they were members of J.P. Morgan Partners, LLC ("JPMP"), a private equity division of JPMorgan Chase & Co. prior to CCMP Capital's commencing operations. Nothing contained herein constitutes an offer to sell or a solicitation of an offer to purchase any investments or securities of any investment vehicles. © 2008 CCMP CAPITAL ADVISORS, LLC. All rights reserved. |
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