Wood Group swoops for PSN
13 Dec 2010
Aberdeen, UK – John Wood Group PLC is to acquire Aberdeen-based energy services company PSN Ltd (Production Services Network) for $955m, and merge it with Wood Group’s production facilities business.
The move is set to create a global brownfield production services unit, called Wood Group PSN.Subject to regulatory approvals, including by the Office of Fair Trading in the UK, completion of the deal is expected in Q2 2011.
Until then, PSN and Wood Group will continue to operate as separate and independent production services businesses.
PSN, which employs over 8,000 and operates in 23 countries, has 2010 sales and earnings of around $1,200m and $100m, respectively. If the deal goes ahead, Wood Group PSN, will employ 22,000 people. operating in more than 30 countries.
PSN’s directors are all to join the merged business, with Bob Keiller as CEO and Duncan Skinner as CFO. The management team for the new company will be made up of PSN management teams and Wood Group’s production facilities’ management team.
PSN was established in 2006, when CEO Keiller and his management team completed a $280m management buy-out from KBR Halliburton.
By uniting PSN with Wood Group we have a unique opportunity to grow our business to benefit our customers and our people, according to Keiller CEO of PSN.
“Since the management buyout in 2006, we have achieved significant success and expansion,” said Keiller. “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.
“The combined new production facilities business 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 company recently scooped a five-year contract, worth over $500m, to provide integrated services to eight of Shell UK Ltd’s North Sea assets. It will succeed Sigma 3 JV (AMEC, PSN, Wood Group), which will continue its activities until May 2011.
PSN competed against the other two JV partners to become sole contractor for Shell: taking over engineering and maintenance services to the Brent field platforms - Alpha, Bravo, Charlie and Delta - and the Shearwater, Gannet, Nelson and Anusuria assets.
Over 1000 JV staff on the Brent and central platforms and within Shell facilities in Aberdeen are expected to be retained after the handover to PSN.
