Wood Group buys rival PSN

OIL and gas services company Wood Group has agreed to buy its smaller rival PSN in a deal worth $955m (£602m) that will create one of the worlds largest providers of services to the oil and gas industry.

The deal will see Aberdeen-based PSN become part of Wood Group’s brownfield division, which devotes its time to servicing ageing oil and gas fields. The enlarged company is expected to generate around $3bn in annual revenues.

PSN chief executive Bob Keiller, will head up the newly merged business Keiller will also join the Wood Group board.

Wood Group said the acquisition would enhance its strategy of maintaining a balance between oil & gas development and “later cycle production support”

Wood Group will take on $328m of PSN’s debt. Its owners, several of whom took part in a management buyout of the firm from Haliburton in 2006, will receive about $80m in Wood Group shares as well as cash.

The owners include the Scottish entrepreneur Tom Hunter whose stake will be worth around £30m.

Bob Keiller, the chief executive who has a near 10 per cent stake, is set to make around £60m from the deal.