Wood Group expands reach through acquisition of PSN

Oil industry service company John Wood Group said it has entered into an agreement to acquire PSN Limited for a total enterprise value of $955m to create the leading global brownfield production services provider.

PSN is an international energy services company employing over 8,000 people worldwide and operating in 23 countries. In the year to end-December, PSN is expected to generate approximately $100m of EBITDA on revenues of approximately $1.2bn.

PSN's CEO, Bob Keiller, will become CEO of the combined production services business and the deputy CEO will be Les Thomas, currently CEO of Wood Group Production Facilities.

The Acquisition of PSN advances Wood Group's strategy of maintaining an appropriate balance between oil & gas development and later cycle production support, creating global market leading positions, developing long term customer relationships, extending services and broadening international reach.

Wood says it will position the enlarged group as a trusted production services provider to the International Oil Companies, with major customers including BP, Chevron, Conoco Phillips, ExxonMobil, Marathon, Shell and Total and to a large number of independent operators including Centrica, Hess, Nexen, Premier and Talisman, and as a key partner to a number of National Oil Companies including Gazprom and TAQA. ;

Allister Langlands, CEO of Wood Group, said: "Wood Group PSN will have a larger footprint, deeper resources and capabilities and, by selecting best practices, be able to deliver additional added value to our customers. The combined business will be better positioned to help tackle current key industry issues, including operational assurance, competency, reliability and asset integrity."

Bob Keiller, CEO of PSN, who will lead Wood Group PSN, said: "I believe that by uniting PSN with Wood Group Production Facilities we have a unique opportunity to grow our business to benefit our customers and our people. Since the management buyout in 2006, we have achieved significant success and expansion. This transaction positions us for the next stage of PSN's development, enabling us to strengthen our service capability to existing and new customers whilst providing enhanced career prospects for our people. Wood Group PSN will retain our clear commitment to safety, excellence in service delivery, innovation and continuous improvement, allowing us to continue to build lasting and strong relationships with clients."

Wood Grpu said the acquisition will be significantly earnings and cash flow enhancing immediately following completion.

The Acquisition is subject to relevant anti-trust approvals and completion is expected in the second quarter of 2011. Prior to completion, both Wood Group and PSN will continue to operate as separate entities.

Wood Group's other businesses in Engineering, Well Support and Gas Turbine Services will be unaffected by the Acquisition.

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