Aberdeen international energy service giant Wood Group announced a significant US acquisition yesterday.
It is paying more than £23million for Baker Energy, the energy service business of Michael Baker Corporation, of Pittsburgh.
Wood said the deal would establish it as the market leader in providing operations and maintenance services in the US Gulf of Mexico.
Baker Energy, which is based in Louisiana, employs about 2,400 people and had turnover of more than £153million last year.
One analyst said the relatively low price implied that ebita (earnings before interest, tax and amortisation) margins at the acquired business were currently low (less than 5%) and it appeared that Wood had paid the equivalent of four to six times ebita: a good price for the Aberdeen company.
Wood said Baker Energy provided a broad range of operations and maintenance services to a large number of oil and gas operators, both onshore and offshore.
It added that Baker had a strong presence in America, including a market-leading position in deepwater activity, and operated in various countries in Africa and Asia-Pacific. The acquisition will also give Wood entry into new markets in Israel, Nigeria and Ghana.
Baker Energy will operate within Wood’s engineering and production facilities division.
Les Thomas, group director responsible for production facilities, said: “The acquisition of Baker Energy is part of our ongoing strategy to expand and enhance our operations support capability. Internationally, it represents an excellent strategic fit with our existing operations support capabilities and extends our international footprint.”
Michael Baker said the sale would allow it to focus on its core engineering, architecture and construction service business.
Peter Hughes, chief executive of the Scottish Engineering body, said: “We would like to congratulate the Wood Group on its acquisition. This is yet another example of a Scottish company making its presence felt in the world market. Such developments are vital in anchoring key manufacturing engineering sectors in Scotland.”
Wood employs 27,000 people worldwide and operates in 50 countries.