First Reserve, Odyssey Investment to buy Dresser Equipment Group

First Reserve Corp. and Odyssey Investment Partners LLC have agreed to acquire Halliburton Co.'s Dresser Equipment Group in a transaction worth $1.55 billion in cash and assumed liabilities. Halliburton revealed last year that it intended to divest the group in order to more closely focus its core businesses.

Jan. 31, 2001

2 min read

First Reserve Corp. and Odyssey Investment Partners LLC have agreed to acquire Halliburton Co.'s Dresser Equipment Group in a transaction worth $1.55 billion in cash and assumed liabilities.

Halliburton revealed last year that it intended to divest the group in order to more closely focus its core businesses (OGJ Online, Apr. 30, 2000). It acquired the group in 1998 as part of its merger with Dresser Industries Inc.

Both First Reserve and Odyssey Investment are equity investment firms.

The Dresser Group is an energy services firm that includes five main divisions: Dresser Valve, Dresser DMD-Roots, Dresser Instrument, Dresser Wayne, and Dresser Waukesha. Revenues are more than $1.4 billion.

Halliburton will retain a 5% equity interest in DEG after closing. Subject to adjustments, Halliburton expects to recognize a pretax gain of about $500 million and after-tax gain of about $300 million upon closing.

Morgan Stanley Dean Witter & Co. acted as financial advisor to Halliburton.

Bill Macaulay, Chairman of First Reserve, said: "Significant reductions in both upstream and downstream capital spending, together with continued increases in energy demand have put the global energy infrastructure under stress. The industry is now poised for a rebound which will include substantial infrastructure investment and increased utilization of natural gas, now the fastest growing source of energy."

The transaction, which is subject to customary closing conditions, is expected to be completed as soon as practicable.