AMEC Acquires Paragon Engineering Services

AMEC has acquired Houston-based oil and gas engineering services company Paragon Engineering Services Inc. for US$38 million in cash. This acquisition furthers AMEC's strategy of expanding its oil and gas business and establishes the company as a Tier One contractor in Houston.

"Houston is the decision center of many of the world's major oil and gas companies and an expanded presence there is a big step forward for us," said Sir Peter Mason, AMEC chief executive. "Oil and gas is our largest end market which accounts for one third of AMEC's total business and we regard it as a real priority for the future."

"Paragon has a blue-chip client list and an excellent reputation," said Neil Bruce, managing director of AMEC's oil and gas business. "There is real synergy in this deal as their specialist engineering expertise and strong relationships with Houston-based customers complement our skills in the project management and engineering of large and complex facilities and asset support services. Together, we will be able to provide enhanced total 'life of asset' service to our oil and gas customers."

Paragon will be merged with AMEC's existing Houston operations and the new company, AMEC Paragon Inc., will operate as part of AMEC's global oil and gas business.

Internationally, Paragon will give AMEC access to South American markets, as well as expanding AMEC's capabilities and customer base in the Middle East, Alaska, West Africa and China through complementary customer relationships and secured work. With some 550 employees, Paragon had total turnover in 2003 of US$57.9 million.

"Paragon and AMEC have worked together on a number of proposals," explains Simon Naylor, president of AMEC's American oil and gas operations based in Houston. "We are impressed with their customer-focused culture, high quality people, and proven track record of providing rapid response for engineering projects."