Remember what Baker Hughes’ Chad Deaton said recently in the Chronicle about how you have to get big to survive in the the oilfield services business? First Reserve’s $1.8 billion leveraged buyout of Aberdeen-based Abbot Group represents a fulfilling of that prophecy.
Will Honeybourne, a managing director for private equity group First Reserve, said today going private will let Abbot invest in “organic growth” opportunities in markets like Russia, Africa and the Middle East at a level the owners of publicly traded shares might not be so comfortable with.
“We clearly want to pile it on here,” Honeybourne said from the Houston offices of First Reserve.
Abbot has two main units, KCA Deutage, which focuses on offshore platform drilling, and Bentec, which is big in onshore platforms. It’s generally better positioned in overseas markets than many of its U.S. counterparts, a fact First Reserve hopes to exploit since that’s where all the new reserves are.
Oh, yeah, I guess that $7.4 billion National Oilwell Varco/Grant Prideco deal is a sign of that “go big” trend, too.