Petroline, one of Aberdeen's most successful technology
companies, has been bought by Houston-based Weatherford International after an auction which raised the price to #104m, or around 25 times Petroline's last profits.
Weatherford, one of the oil
service industry's biggest quoted companies with a #2bn turnover, intends to use the acquisition as a platform for expansion into
international markets at a faster rate than Petroline, with sales last year of #20m, could have achieved.
Rival mega-players Shlumberger and Baker are understood to have been outbid, while financial players including 3i also looked at the company after it was put up for sale in May.
Petroline's chairman Klaas Zwart, who founded the company in 1980 and has 97% of the shares, is understood to have made ex gratia payments to all 250 employees in Aberdeen and Arbroath.
The deal involved #20m of cash and #84m in Weatherford shares, and was announced yesterday to the New York Stock Exchange, while staff in Scotland were
summoned to meetings.
Petroline designs and manufactures its own downhole technology, notably its expandable slotted tubing (EST) products, which are seen as having huge global potential in the ''completion'' market.
Weatherford vice-president Don Gelletly said: ''It adds some key completion capabilities in flow control and sand control, which are two critical areas that we
didn't have. Petroline has a very fast-growing product which makes the economics in the year 2000 look a lot more attractive.''
Chairman and chief executive Bernard Duroc-Danner said: ''Petroline represents a key component of our long-term completion strategy.''
Alec Carstairs at Ernst & Young, which handled the transaction, commented: ''This is very positive for Aberdeen because the company now has very serious opportunities of growing very fast.''
He added: ''Entrepreneurs who have built a business often realise that the next stage of growth is best outside their hands.''
The deal is the latest in a seemingly inexorable process which is seeing control of some of Scotland's most innovative technology-based offshore
service companies pass to
bigger, usually overseas, groups.
Steve Scullion, analyst at oil industry consultants Wood Mackenzie, commented: ''Oil companies want to deal with a minimum number of contractors and suppliers rather than having to go to two or three biggies and half-a-dozen other specialists.
''What we are seeing is the
service sector reacting to that . The oil companies themselves have been consolidating, and suppliers need to beef up their own financial ability to support them.''
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