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With oil and gas M&A activity hitting a ten-year low in the first quarter of 2009, private equity investment deals were limited throughout the year.
Despite these market conditions Aberdeen headquartered ITS Group, a leading supplier of drilling equipment and services to the global oil and gas industry, decided this was the right time to secure a $55m investment from private equity firm Lime Rock Partners. The company is now well placed to push on with its plans for growth and is on the lookout for potential acquisitions, as it aims to become a major global player in the oilfield drilling sector.
While market conditions in the last 12 months have been challenging and continue to remain so, ITS is pursuing strategic acquisitions that will strengthen and enhance its service and geographical foot print, with the Middle East, Asia Pacific and Central & South America identified as key growth areas.
The funding from Lime Rock Partners followed a three year period of significant capital expenditure, where ITS had invested in new facilities and equipment to expand its international offering. In the past year, the company also partnered with Shoaibi Group and Scomi Group BHD to enhance its presence across Saudi Arabia and Asia Pacific. These international partnerships also played a key role in securing the funding to assist the company’s organic and acquisition led growth aspirations.
Founded in 1986 by current executive chairman, Bob Kidd, ITS provides a wide range of oilfield equipment and services including drilling and pressure control equipment, and fishing, casing running and machine shop services. Today, the group operates from 25 facilities across 16 countries and employs a global workforce in excess of 1,100 people.
Scott Milne, group corporate development director, said, “The timing and commitment from Lime Rock is important – we have invested over $150m on products, services and infrastructure in the past three years.
“We believe the current capacity of the business gives us an excellent platform from which we can integrate acquisitions. Whilst the recession has presented the industry with many challenges, our medium-term outlook on market fundamentals is positive and we are actively pursuing companies that are compatible with our strategy for growth.”
Fundamental to ITS’s strategy has been its ability to recognise and respond effectively to customer demand. In 2009 alone, ITS opened three new facilities in Mexico, as well as bases in Iraq and Kazakhstan, while adding new product and service lines.
Mr Milne continued, “Our core objective is to provide our customers with drilling solutions whenever and wherever they need it. To do this, we have continued to invest in selected key geographies whilst at the same time strengthening our product and service offering – an approach that is co-ordinated to bring us closer to our customers. This has been a successful strategy so far and it is one that we will continue to deploy with acquisition opportunities as we look to drive additional growth across the business.”