Abbot Group to acquire Deutag in expansion outside North Sea

HOUSTON, Aug. 31 -- UK energy services provider Abbot Group PLC has agreed to acquire Deutsche Tiefbohr AG (Deutag), which provides drilling and workover services to the oil and gas industry, for £134 million in cash, including repayment of £75 million in debt.

Deutag also provides rig design and engineering services, as well as rigs and rig components.

Diversified group Preussag AG indirectly wholly owns Deutag.

"While Abbot has continued to strengthen its position in the UK, the Company's philosophy has been to seek business opportunities overseas, thereby reducing its dependency on its North Sea area of operation," said the company.

The deal is subject to shareholder approval, among other conditions, said Abbot.

Deutag owns KCA Drilling, Bentec, and OIS International Inspection PLC. It also holds an interest in a wind power joint venture with PowerGen, PowerGen Renewables Holdings Ltd.

Abbot said the acquisition would make it a world leader in drilling rig design, construction, and operation; one of the largest international land drilling operators; and a major force in offshore platform drilling.

Abbot also said it plans to raise £44.3 million via an open offer of 29.3 million shares. It plans to use the money to help satisfy the cash consideration for the acquisition. Abbot has also agreed a £142.5 million facility with the Bank of Scotland subject to completion of the acquisition of Deutag.

If the acquisition is not completed, Abbot will use the placing to repay debt and provide working capital. It will not, however, use the bank facility.