Delivering the Difference - Oil, Gas & Power
Vetco goes from strength to strength
Deal type: Buyout, Trade sale to GE
Value: €1.5bn
IRR: 82%
After the original, ground-breaking buyout from ABB in 2004 when 3i invested €101m, GE agreed to purchase Vetco subsidiary Vetco Gray for an enterprise value of €1.5bn.
The business
Vetco Gray, headquartered in Houston, is one of the world’s leading suppliers of drilling, completion and production equipment for onshore and offshore oil and gas fields, including subsea applications. The business, which is expected to report over €1.2bn of sales in 2006, employs 5,000 people in more than 30 countries.
3i played an important role in recruiting CEO Dr Peter Goode who was instrumental in driving Vetco Gray’s tremendous growth and increasing its market share. Goode helped Vetco win new contracts in Angola, Brazil, Norway and Australia. He has also driven initiatives to enhance the Vetco brand and championed a culture of excellence across the business.
3i and syndicate partners retain ownership of Vetco’s other subsidiary, Aibel, which maintains, modifies and operates onshore and offshore oil and gas production facilities.
The business operates across 17 countries with over 5,000 professionals. 3i Head of Oil, Gas and Power, Graeme Sword says Aibel is a business with excellent potential for further organic growth. “We have every confidence that both businesses will continue to expand and maximise their opportunities within the current market.”
3i participation
3i involvement has added significant value to the business. When Vetco was acquired by 3i and the other private equity firms, a key factor in securing the purchase was having 3i involved. The deal was particularly challenging and required an investor that had the international experience, network and, importantly, a strong understanding of
the oil and gas sector.
Why 3i?
“What really impresses me most about 3i is that they have people who really understand oil and gas and they’re very proactive with marketing our business through their network. This was valuable in delivering such a strong exit.”
Dr Peter Goode, CEO, Vetco