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3i, Candover and JPMorgan Partners sell Vetco Gray for US$1.9bn

A private equity syndicate comprising Candover*, 3i and JPMorgan Partners** today announce the sale of Vetco Gray to GE’s Oil & Gas division for an enterprise value of US$1.9 billion (€1.5 bn) on a debt-free, cash-free basis. Completion of the deal is expected in February 2007.

The sale of Vetco Gray, and the spin out of Vetco Aibel, marks a partial exit from Vetco International for the syndicate, which acquired the business in July 2004 from ABB Oil & Gas. 

Vetco Gray, headquartered in Houston, is one of the world’s leading suppliers of drilling, completion and production equipment for on and offshore oil and gas fields, including Subsea applications.  The business, which is expected to generate over $1.6 billion of sales in 2006, employs 5,000 people worldwide in more than 30 countries.

Candover, 3i and JPMorgan Partners will remain as shareholders in the other operating subsidiary company, Vetco Aibel, a leading provider of upstream oil and gas production facilities, process systems, technology, services and products. From new build to decommission, it maintains, modifies and operates on and offshore oil & gas production facilities.  The business operates across 17 countries with over 5,000 professionals.  The business will be renamed Aibel.

Commenting on the sale, the private equity syndicate commented:

“Vetco International has performed strongly under our ownership, and generated an impressive return in under three years.  Under the leadership of Peter Goode, management have driven tremendous growth in sales and EBITDA.  Rising oil and gas prices, and the associated increase in oil and gas drilling and production have further advanced Vetco International’s performance. 

“We retain Aibel, an exceptional business, and look forward to harnessing and furthering the growth prospects of the company.  We have every confidence that both businesses will continue to expand and take advantage of the current market environment, and we wish the management and staff at Vetco Gray every success.”

Commenting on the syndicate’s continued investment in Aibel, Vetco International CEO Peter Goode said:

“The Vetco International management team has established a strong and successful working relationship with the private equity syndicate over the past two and a half years and we are delighted that this will continue under our extended ownership of Aibel.  With the sale of Vetco Gray now agreed, management’s focus will be to grow Aibel organically and secure an attractive exit for the private equity syndicate in an appropriate time frame.”

*Candover means Candover Investments plc and / or one or more of its subsidiaries, including Candover Partners Limited as General Partner of the Candover 1997 and 2001 Funds and as Manager of the Candover 2005 Fund.

** JPMorgan Partners refers to J.P. Morgan Partners, LLC and its controlled investment vehicles.

Notes to editors

3i is a world leader in private equity and venture capital with operations in Europe, the United States and Asia. 3i is active across all stages of funding. From early-stage venture capital to growth capital, buyouts and infrastructure, 3i invests approximately €2bn a year in some of the most exciting and ambitious companies in the world. 3i is the only FTSE 100 company in its sector and has total funds under management of £7.0bn (€10.4bn).

3i’s oil, gas & power team manages an investment portfolio with a value of $1bn across the UK, Norway, USA and Singapore.  The current portfolio includes EDP, an oilfield development project manager and Noreco, a Norwegian independent exploration and production company.  Successful realisations include Petrofac, the international oil and gas facilities service provider, which floated in October 2005; Revus Energy, the independent Norwegian upstream company, which floated in June 2005; and CH4 Energy, a leading exploration and production company, which was acquired by Venture Production plc in August 2006.  Other previous portfolio companies include Wood Group and Venture Production.

3i Buyouts is a leader in the European mid-market, leading mid-market buyouts of up to around €1bn enterprise value. In November 2006, 3i successfully completed the close of its €5bn Eurofund V. This fund followed another successful year for 3i Buyouts with significant realisations across Europe including the sale of: German generic prescription drugs distributor, betapharm; own-label Dutch fruit juice business, Refresco; Swedish clothing, home and accessories retailer Gant; UK environmental due diligence firm ERM; international foreign exchange specialist Travelex; and pan-European directories business Yellow Brick Road.

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