First Reserve Corporation, has agreed to sell Power Well Services, a platform company it created in 2004 to consolidate companies in well testing and fluid analysis, to UK-listed oilfield service company Expro International Group.
Expro will pay $674.5 million for the company including $115 million in Expro common stock and about $560 million in cash. After the repayment of Power Well’s outstanding debt, the company’s shareholders will receive approximately $300 million in cash.
First Reserve created Power Well in 2004 as a platform to consolidate companies in the worldwide oil well testing and fluid analysis market. The cornerstone acquisitions for the company were Power Chokes, a Houston-based provider of well testing, managed pressure drilling and wellbore cleanup activities, and the surface well testing operations of Halliburton Company, which operates in 22 of the world’s most active oil and gas producing countries.
First Reserve also rolled in Norwegian energy company Petrotech and the well testing operations of French energy company Geo Services, which gave it a presence in eight additional countries.
“We realized that there are several complimentary services from an industrial fit standpoint that you can put with well testing, and given that we had access to some great markets around the world, we felt like this platform could support a lot of growth via acquisitions,” said First Reserve director Bob Edwards.
Edwards said that the strategy of leveraging the company’s global reach paid off, enabling them to give a global reach to the entities it acquired. He added that a quick exit was not necessarily part of First Reserve’s strategy, but when Expro approached them earlier this year they decided it was the right time to sell.
First Reserve is the largest and oldest private equity firm specializing in energy, and has offices in Greenwich, Connecticut, Houston and London. In January 2004 the firm closed its tenth fund dedicated to the energy sector on $2.3 billion. Since then it has backed four very successful IPOs in exits from Dresser Rand, Alpha Natural Resources, Foundation Coal and Quintana Maritime. The firm has had an increasingly global focus since it opened its London office in 2004, and is currently raising its eleventh fund.