Scottish oil services giant Wood Group has announced it is to take over rival PSN in a £600 million deal.
The merger of the two Aberdeen-based firms will create the UK’s biggest oil services company. It will also be Wood’s largest acquisition to date.
PSN, an international energy services company, will merge with Wood’s Production Facilities business to create the brownfield production services provider, Wood Group PSN.
PSN currently employs 8,500 people in 28 countries, with nearly a third of them working in Aberdeen or the North Sea. In the year to 31 December 2010, PSN is expected to generate profits of approximately $100 million (approx. £63.3 million) on revenues of around $1.2 billion (approx. £760 million).
PSN’s CEO Bob Keiller will become CEO of the combined production services business. The deputy CEO will be Les Thomas, currently CEO of Wood Group Production Facilities.
Commenting on the acquisition, Wood’s CEO Allister Langlands said: "Wood Group PSN will have a larger footprint, deeper resources and capabilities and, by selecting best practices, be able to deliver additional added value to our customers. The combined business will be better positioned to help tackle current key industry issues, including operational assurance, competency, reliability and asset integrity."
Bob Keiller added: “I believe that by uniting PSN with Wood Group Production Facilities we have a unique opportunity to grow our business to benefit our customers and our people. Since the management buyout in 2006, we have achieved significant success and expansion.
“This transaction positions us for the next stage of PSN’s development, enabling us to strengthen our service capability to existing and new customers whilst providing enhanced career prospects for our people.”
He concluded: “Wood Group PSN will retain our clear commitment to safety, excellence in service delivery, innovation and continuous improvement, allowing us to continue to build lasting and strong relationships with clients.”
The acquisition is subject to relevant anti-trust approvals and completion is expected in the second quarter of 2011. Wood Group's other businesses in engineering, well support and gas turbine services will be unaffected by the acquisition.
With a current stock market valuation of more than £2.5 billion, Wood employs more than 29,000 people and operates in 50 countries.
