Petrofac signs agreement to buy W&W Energy Services

Petrofac has signed an agreement to acquire W&W Energy Services, a provider of infrastructure services to oil producers.

The sale and purchase agreement refers to Petrofac’s acquisition of an entry-level position in the US onshore operations and maintenance market.

Under the agreement, the company will acquire W&W, which offers maintenance, repair and pipeline tie-in services in the Permian Basin, for an initial cash consideration of $22m.

The transaction value comprises firm and deferred cash payments, bringing the total consideration to 4.5 times average of W&W EBITDA for a period of three years, starting from this year until 2021.

Petrofac noted that the acquisition aligns with the company’s strategy to position engineering and production services (EPS) for growth by emerging into different markets across new geographies.

The company will pay deferred true-up and earn-out payments based on W&W’s financial performance over a three-year period, which would end in December next year.

Petrofac EPS chief operating officer John Pearson said: “This bolt-on provides a platform to grow EPS using a low-risk reimbursable services model in the US onshore services market.

“As production volumes, infrastructure support requirements and the activity of major operators rise in the Permian, we are confident that the combination of W&W’s footprint and strong local brand with Petrofac’s engineering and modifications capability and global track record can unlock growth.”

In a separate development, Petrofac secured new engineering and production services (EPS) contracts and extensions in the North Sea and Malaysia worth $120m.