Lloyd’s Register announced today that it has acquired Houston-based WEST Engineering Services in a move that secures the group’s position as a premier independent risk-management organization supporting the global offshore drilling industry.
Lloyd’s Register says that WEST Engineering Services, predominantly experts in subsea systems, particularly Blow Out Preventers, will join the Lloyd’s Register Group effective May 1 and will combine with the ModuSpec Group and other members to offer the world’s most comprehensive suite of technical services to owners and operators of offshore drilling rigs.
“The acquisition of WEST further expands the global portfolio of technical services we can offer to the drilling sector, building on the world-class support we already provide through our Energy team which includes the ModuSpec Group, ODS and the Scandpower Group,” said John Wishart, Lloyd’s Register’s Energy Director. “We are now, without question, the industry’s leading independent provider of technical support for safe and environmentally responsible drilling operations as the world continues its search for new energy resources.”
Under the terms of the acquisition, WEST Engineering Services will become a member of the Lloyd’s Register Group, a global organization that provides independent assurance and expert advice to companies operating high-risk, capital-intensive assets in the energy and transportation sectors.
Michael Montgomery, owner and founder of WEST, will retire as President and will be retained by Lloyd’s Register as an advisor. Paul Huber, President, Lloyd’s Register Americas, Inc, will become the President of WEST, while Duco de Haan will remain as the Chief Executive Officer and Managing Director of the ModuSpec Group.
“I am extremely pleased to continue the growth of WEST and to secure the future of our valuable employees and customers by becoming a part of a company that shares many of the same values as us,” Montgomery said. “The Lloyd’s Register Group shares our commitment to people and also has a reputation for excellence in independent verification services. I am very grateful to Len Paton with PPHB for helping us find such a great fit.”
WEST’s employees will be co-located with ModuSpec USA in Lloyd’s Register America’s headquarters in Houston from where they will work to provide a unique and comprehensive portfolio of services to the upstream areas of exploration, production and transport prior to refining. Over time, it is expected that the two companies will fully integrate to form a single entity.
Together, the ModuSpec Group, which became a member of Lloyd’s Register in 2008, and WEST will employ more than 550 people, 230 of whom will be based in Houston. The remainder will work from strategic locations around the world.
They are highly complementary businesses, said Huber.
“This is a highly strategic acquisition as it combines companies that are known for innovation and leadership in the systems and well-control areas of offshore drilling,” Huber said. “All the members of the Lloyd’s Register Group — new and old — have a shared ambition: to make the drilling industry safer and more reliable. The acquisition of WEST is another step in the execution of our strategy to add value to society and achieve sustainable growth by providing independent assurance and expert advice to those who operate the critical infrastructure on which we all rely.”
The acquisition of WEST will be a further boost to a Lloyd’s Register’s Energy division whose income grew at an annual rate of 24% between the 2005/06 and 2010/11 fiscal years, during which time Group income increased from £420 million to £855 million.
The value of the acquisition was not disclosed, however Mr. Huber did reveal at the OTC press conference that this is the largest acquisition ever made by the Lloyds Register group.