Kohlberg Kravis Roberts, Technip and Candover head for Expro clash

 

 Dr Chris Fay 

The Sunday Times: Kohlberg Kravis Roberts, Technip and Candover head for Expro clash

April 13, 2008
Ben Marlow

EXPRO, the oilfield-technology company, is to be the subject of a takeover battle after it received a number of bid approaches.

The company has received expressions of interest from the buyout giant Kohlberg Kravis Roberts (KKR) and French rival Technip, following an earlier approach from Candover, the private-equity firm.

Although KKR and Technip have held talks with Expro’s management, it is not known whether they have been given access to the company’s books or how advanced their interest is.

KKR’s approach is the first by the US firm in the energy sector, and a further sign that private-equity firms are looking into new areas for investments as the credit crunch makes opportunities harder to come by.

Candover, however, is still seen as the frontrunner after it made the initial approach to Expro in February, valuing the company at about £1.3 billion.

Last week the buyout group sold a £170m stake in oil and gas-pipeline maker Wellstream.

City sources said the move could be designed to bolster funds ahead of a bid for Expro, which is led by chairman Chris Fay, former head of Shell UK.

However, bankers believe that Candover is unlikely to bid for Expro alone as it would require the firm to put up too much of its fund.

Speculation has centred on First Reserve, the US energy-specialist private group that beat Candover to the £900m takeover of Abbot, the Aberdeen-based oil-services company.

A possible battle for Expro, which specialises in deep-sea oil and gas technology, underlines the huge interest in businesses that provide specialist services to the energy sector, which is booming on the back of record oil prices.

There has been a flurry of recent deals resulting in firms going for eyewatering prices.

Expro has been another beneficiary of the boom. In 2007 it made underlying profits of £72.5m on sales of £518.8m, and last week it said full-year profits would be at the top end of management expectations.

Demand for the company’s services has soared as international oil companies increase exploration work worldwide and national oil firms become more able to finance their own exploration work.

Shares in Expro closed at £12.43 on Friday but earlier in the day reached a 52-week high of £13.02 as speculation intensfied that the company was being courted by several potential buyout suitors.

Analysts expect Expro to eventually be sold for as much as £15 a share, giving it a market value of £1.6 billion.

The company has signed an agreement with BP to develop a form of specialist underwater technology, which analysts believe could transform its value.

http://business.timesonline.co.uk/tol/business/industry_sectors/natural_resources/article3671642.ece

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