Candover, 3i and JPMP sell Vetco Gray for US$1.9bn

Candover, 3i and JPMorgan Partners has sold Vetco Gray to GE’s Oil & Gas division for US$1.9bn. It is a partial exit for the consortium which acquired parent company Vetco International, a UK headquartered supplier of products and services to the upstream oil and gas industry, in July 2004 from ABB Oil & Gas.

The sale sees the spin-out of Norwegian subsidiary Vetco Aibel, a project management, engineering, procurement and construction services company for the upstream oil and gas industry. The consortium has retained a stake in this business.

3i invested US$123m in 2004 time and this realisation sees the firm generate a 3.5x return.

Vetco Gray, headquartered in Houston, is one of the world’s leading suppliers of drilling, completion and production equipment for on and offshore oil and gas fields. The business, which generated around $1.6bn in sales in 2006, employs 5,000 people in more than 30 countries. In a statement, the private equity syndicate said: “Vetco International has performed strongly under our ownership, and generated an impressive return in under three years. Under the leadership of Peter Goode, management have driven tremendous growth in sales and EBITDA. Rising oil and gas prices, and the associated increase in oil and gas drilling and production have further advanced Vetco International’s performance.

Candover, 3i and JPMorgan Partners remain shareholders in the other operating subsidiary company, Vetco Aibel, which will be renamed Aibel and provides upstream oil and gas production facilities, process systems, technology, services and products. Vetco International CEO Peter Goode said: “The Vetco International management team has established a strong and successful working relationship with the private equity syndicate over the past two and a half years and we are delighted that this will continue under our extended ownership of Aibel. With the sale of Vetco Gray now agreed, management’s focus will be to grow Aibel organically and secure an attractive exit for the private equity syndicate in an appropriate time frame.”