First Reserve Corporation, the private equity energy specialist, has agreed to purchase Dresser-Rand from parent company Ingersoll Rand for $1.2 billion (€990 million).
New York-based Dresser-Rand builds infrastructure equipment for the oil and natural gas industries including turbines and compressors and reported revenues of $1.3 billion last year.
Commenting on the deal, chairman and chief executive officer William Macaulay said: “With higher prices, oil companies want to be as efficient as they can be. Oil companies historically did a lot of this work on their own, but as their work force starts to age, they need to outsource.”
The transaction is the latest in a series for Greenwich, Connecticut-headquartered First Reserve, which has spent over $2 billion in three transactions this year and has $4.7 billion in total under management.
In May, the firm was part of a consortium including The Blackstone Group that agreed to buy RAG American Coal Holding from Germany’s RAG Coal International for approximately $1 billion. The firm also bought a small well-testing operation from Halliburton for $129 million.
First Reserve closed its tenth fund dedicated to the energy sector on $2.3 billion in January and recently opened a London office. Macaulay said this would “accommodate the heavy [energy-related] deal flow coming out of Europe” in a recent interview with Private Equity International.