Abbot Group Proposes to Acquire Deutag
Abbot has conditionally agreed to acquire Deutag for a maximum consideration of £134 million in cash (including the repayment of intercompany debt of £75 million). Deutag's core business is the supply of drilling and work-over services to the oil and gas industry, both onshore and offshore, on an international basis. In addition, it is a supplier of rig design and engineering services and of rigs and rig components.
Abbot is to raise approximately £44.3 million, net of expenses, by way of a Placing and Open Offer of 29,306,041 New Ordinary Shares at 155 pence per share. The Bank of Scotland will provide a £142.5 million facility subject to completion of the acquisition.
Once Abbot has acquired Deutag, the company will be a major force in offshore platform drilling and one of the largest international land drilling operators outside of North America. The Company will be one of the world leaders in drilling rig design, construction and operation; and significantly distinguished, both technically and commercially, from its competitors.
Abbot also announced the interim results for the six months ended 30 June 2001 showing pre-tax profits, excluding goodwill amortization, up 20% to £6.5m (2000: £5.3m) and adjusted earnings per share, excluding goodwill amortisation, up 19% to 3.2p (2000: 2.7p).
Alasdair Locke, Executive Chairman of Abbot, commented: "This acquisition is an exceptional opportunity for us to accelerate our ambition of creating a major European-based company in the international oil drilling contracting industry. As a result of the acquisition, we will have the ability to offer our customers (particularly the major oil operating companies), a full range of production drilling services, both onshore and offshore, on a global basis, together with engineering, rig design and construction services - a package that we believe is virtually unique in the oil drilling contracting industry. The acquisition is also consistent with our strategy of growing our business, both by internationalising our operations and reducing our reliance on the North Sea."