March 19, 2008

Scotland’s Production Services Network acquires Tartan Engineering Ltd.

Richard Gilbert

staff writer

A Scottish engineering services firm is establishing a presence in the western Canadian construction market through the acquisition of Calgary-based Tartan Engineering Ltd.

Tartan Engineering Ltd. is a 30 year old Canadian company, which specializes in engineering, procurement, construction and management in the energy and utilities industries.

The company has completed more than 7,000 projects in Canada, with specific expertise in crude oil, natural gas, pipelines, power and water.

Production Services Network (PSN) is an Aberdeen-based services contractor that was formed when CEO Bob Keiller and his management team completed an award-winning $280 million(US) management-buy-out from Kellogg Brown and Root, nearly two years ago.

PSN announced on March 5 that the company was buying Tartan Engineering Ltd, in order to enter the Western Canadian market.

“The size and scope of the Western Canadian market matches any that we’ve seen around the world. Western Canada represents a fantastic international source for growth in the oil and gas sector and establishing a presence in this market is critical to PSN’s global strategy,” said Bob Keiller.

“This acquisition combines PSN’s experience managing the world’s largest, most complex oil and gas projects, with Tartan’s specific expertise in Western Canada.”

PSN, which has more than 8500 employees around the world, has a well established engineering hub in St. John’s, Newfoundland and Labrador, supporting existing customers in the Canadian Atlantic provinces.

The acquisition of Tartan provides a way for PSN to extend its operations into a hot Western Canadian construction market.

“It is hard to grow organically in the Calgary construction market, because it is so busy and hard to find good people,” explained Mark Adams, vice president of business development at Tartan Engineering.

However, there is more to this acquisition than the obvious advantages of establishing a presence in western Canada.

“I guess the first thing that it (the acquisition) does is it allows us (Tartan) to go after larger and more interesting projects and creates opportunities for our staff,” Adams said.

“This is not just about PSN supporting us locally. The acquisition gives us access to engineering resources through PSN. This is about us supporting PSN internationally.”

PSN is a major global service contractor to oil, gas and other process industries and is one of the top ten largest private Scottish companies with revenue more than $ 1.2 billion (US).

“We are getting inquiries from all over the world through PSN, which has separate divisions all over the world,” Adams said.

“Tartan is no longer a company with 150 people. There will be other opportunities to work all over the world.”

The acquisition, which is still in the early stages of planning, will take several months before it is completed.

“We will be going through an integration phase. What we would call a transition phase. We will integrate some of the systems between Tartan and PSN over the next 6 months,” Adams explained.

“Some of us will go to Aberdeen and some of the PSN people will come to Calgary.”

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