GE acquires First Reserve portfolio company for $3bn

Infrastructure energy and service provider Dresser split from Halliburton in a 2001 buyout led by First Reserve. GE will integrate the business into GE Energy, where it’s expected to ‘enhance’ GE’s ability to grow in developing countries.

GE has closed its acquisition of Dresser, an energy infrastructure equipment and service provider, from First Reserve and Riverstone funds for $3 billion.

GE said Dresser will become part of the power and water units and energy services units of GE Energy, where it is expected to “enhance GE Energy’s ability to grow in developing countries”, a spokesperson told Infrastructure Investor.

Texas-based Dresser makes equipment for refining, distribution, storage and transportation of oil and gas, among other things, according to its website. It was once a competitor to oil giant Halliburton, but the rivals merged in 1998, when former US Vice President Dick Cheney was still chief executive of Halliburton.  The stock merger was valued at $7.7 billion at the time of its announcement.

Dresser split from Halliburton ten years ago, when First Reserve led a $1.55 billion management buyout of the company.  First Reserve teamed with Odyssey Investment Partners on the deal. Riverstone Holdings acquired its stake in Dresser in May 2007.

Riverstone declined to comment on the size of its stake in Dresser. But Dresser chief executive John Ryan said in an interview with the Dallas Morning News that Riverstone’s deal valued Dresser at $2.4 billion, and that First Reserve had retained a 40 percent share in the company. 

First Reserve said Dresser’s customers include “most of the world’s major oil companies” as well as multinational developers. Eight-five percent of its revenue come from energy customers, according to its website.

Other recent GE acquisitions include the purchase of Wellstream Holdings, a manufacturer of subsea production pipeline products, for $1.3 billion in December.  GE Energy Financial Services also recently acquired 24.95 percent of ArcLight’s portfolio of five power plants in the state of Georgia for an undisclosed sum. 

Morgan Stanley acted as exclusive financial adviser to Dresser, according to a statement.