First Reserve targets £1bn UK take-private

The US energy specialist is bucking the buyout slowdown as it looks to growth in the booming oil market, where it has invested for more than 25 years.

First Reserve Corporation, an energy-focused private equity firm, is buying London Stock Exchange-listed Abbot Group, an oil services group.

The deal, which values Abbot’s existing issued share capital at £906 million ($1.8 billion), will be the largest private equity buyout ever accomplished in the drilling services industry and the first and largest European oil field services take-private, the firm said.

First Reserve has received irrevocable undertakings through its bid vehicle Turbo Alpha from the members of the Abbot board of directors who hold shares. They represent approximately 13 percent of the company’s existing issued shares. The management of Abbot Group is proposing to invest £25 million of equity to demonstrate its commitment to the business.

Pending approval of Abbot shareholders the transaction is expected to complete in the first quarter of 2008.

The firm will fund further expansion in markets including Russia, the Caspian area, the Middle East as well as North and West Africa.

The Abbot Group operates in more than 20 countries worldwide.  The group’s predominant focus is on providing drilling services and rig operations to major oil companies in its key strategic areas of Europe, North and West Africa, the Middle East, the Caspian area and Russia. 

It is the largest offshore platform drilling contractor in the North Sea. Abbot is also a leader in the field of drilling rig design and construction and the manufacturer of land drilling rigs and related components.

First Reserve Corporation has over 25 years been instrumental in building several of the industry’s biggest and most recognisable names including Weatherford, National Oilwell Varco  and Dresser-Rand Group.

In Europe, First Reserve Corporation portfolio companies include global well testing company PowerWell Services, which acquired the well testing division of the French firm, Geoservices, and Norwegian downhole sampling company Petrotech.