By Jeannie Kever
Forum Energy Technologies was formed through a five-way merger three years ago and hasn’t stopped growing. The acquisition of Moffatt 2000 Ltd., announced earlier this month, was the company’s 14th, and CEO Cris Gaut said Forum continues to look for opportunities that expand what it can offer customers.
Gaut worked for Ensco International — he was co-chief operating officer and now serves on the board of directors — and was president of the drilling and evaluation division at Halliburton before taking the helm at Forum. He talked with FuelFix about Forum’s growth and how the company evaluates new opportunities. Here are edited excerpts:
FuelFix: What will the acquisition of Moffatt 2000 give your company?
Gaut: We are growing our drilling equipment business, our subsea business and our production business. The acquisition of Moffatt 2000 fits into our subsea business line and expands the product offering for our existing customer base, the offshore construction companies.
Moffatt is a leading provider of pipeline integrity and testing equipment, based in Newcastle, in northeast England.
FuelFix: So it will strengthen your position in Europe?
Gaut: Moffatt has a good market position in the North Sea, and with the combination of Moffatt and Forum, we can expand their sales into Brazil and the Gulf of Mexico and Asia. We’re already pretty big in the North Sea with our remotely operated vehicles. This is just another product that helps us with that market position in the North Sea.
Gaut: Blohm + Voss expands our drilling equipment business. It primarily serves international drilling contractors, offshore drilling contractors. Previously, Forums’ offering was primarily directed to North American drilling contractors, so there’s an obvious complement there.
With Global Tubing, part of our strategy is to look for companies in markets that are fairly consolidated, where there aren’t a large number of big competitors. Another aspect of Global Tubing’s business that was attractive is their products are repetitive sales. The oil service companies who use Global Tubing for the servicing of their wells and the completion of their wells frequently have to replace the coiled tubing. We like the repetitive nature of the business.
FuelFix: What guides you in looking for companies? How do you know what’s the right fit?
Gaut: Strategically they need to fit with our existing business lines. So we’re looking for things that will help us round out our production lines. We look for companies that have established a good market position but might need further help or additional resources to take their growth to the next step.
Obviously we have to review many different opportunities and talk to many different prospects in order to winnow that down to the deals that finally get completed.
FuelFix: Do you have a goal that you want to reach and then you’ll slow down on acquisitions, or is it all about being ready for the right opportunity?
Gaut: At this point, we see a very good environment for future acquisitions and a large number of attractive opportunities. But we are also continuing to grow organically, developing products internally, expanding geographically.
FuelFix: How much of your growth is acquisition vs. internal?
Gaut: It’s been about half and half.
FuelFix: How did your background with Halliburton and Ensco prepare you for running a company?
Gaut: When I joined Ensco, it was very small. We made Ensco a success through a large number of acquisitions and rapid growth. I had the opportunity to be very involved and benefit from that experience. I also learned a great deal from my time with a much larger oil service company in Halliburton and the very sophisticated systems that a larger company like that has.