IHS GROUP ACQUIRES PETROLEUM INFORMATION / DWIGHTS (January 1998)

Acquisition Creates World’s LeadingSource of Information on Oil & Gas Exploration & Production Activities

Following on from its takeover of Petroconsultants in 1996 (PDM Vole 1 N 4) Information Handling Services Group Inc. (IHS), the leading international information database publishing group, has announced the acquisition of Petroleum Information / Dwights LLC (PI/Dwights), based in Houston. PI(Dwights) is the result of the recently completed merger of Petroleum Information Corporation and Dwight’s Energydata, Inc., together described as "the leading source of information on oil and gas production and well history data across North America and in the North Sea".

synergy

Miles Baldwin, Vice President of Corporate Development at IHS told PDM "PI/Dwights and Petroconsultants have a perfect fit and represent great potential for synergy. Additionally IHS has a lot to offer the two units in terms of performant databases, web-based information distribution and adding value to delivered data. IHS has undertaken a large migration to electronic commerce over the last 6 years or so and some 95% of revenues are from e-sales. Our acquisition of Petroconsultants has been a runaway success for IHS so far, we have every expectation that the PI/Dwights will leverage this further." Michael J. Timbers, Chairman and CEO of IHS Group described the acquisition of PI/Dwights as a "natural extension of IHS Group’s 1996 acquisition of Petroconsultants, the leading supplier of information on oil and gas exploration and production activities outside of PI/Dwight’s core North American markets." He explained that "IHS Group now represents the most comprehensive source of information on energy exploration and production around the world."

maneuvers

Corporate maneuvers revolving around Petroconsultants PI and Dwights have had a long history with PI looking to acquire Petroconsultants as far back as 1971. Several attractive offers were made over the years but they failed to tempt Petroconsultants' president and founder Harry Wassal who preferred to keep his company rather than take the money. More recently Petroconsultants looked at both Dwights and PI but their merger and the subsequent acquisition of Petroconsultants by IHS pre-empted these efforts.

Further down the road, a name change is a possibility for the new grouping ,but this is causing some headaches. All the members of the new group have strong brand images and strengths in various parts of the world. Calling the new group "Petroleum Information/ Dwights/Petroconsultants" is generally held to lack pizzazz. In countries where one or other of the constituent companies has a predominant position, it will be business as usual on the corporate branding front. Elsewhere such as in the UK, some reorganization will be inevitable.

Suter to go

Christian Suter, president of Petroconsultants told PDM of that he had tendered his resignation about a year ago, after 12 years with the company. He will be leaving the group in May 1998. In the interim, the new merged unit will be jointly led by Suter and Charles Ivey CEO of PI/Dwights. Suter will remain with the group in a consulting position after that date while Ivey assumes the role of CEO of both companies. Suter told PDM "The combination of PI/Dwights and Petroconsultants has created many interesting possibilities for improved and more cost effective services to our combined client base".

To date the technical input from IHS into Petroconsultants has been minimal with some exchanges of experiences in the field of secure communications. Suter foresees increased synergy coming from the association with PI/Dwights. To accelerate this process an exchange of senior management roles is already underway. Matt Carter (from IHS) will be VP Finance for both of the units, David Nol (PI/Dwights) will head up the group's technology division and Dale Pennington (Petroconsultants) is in charge of sales marketing and product support.

Model merger?

The thorny issue of a merger of the two constituent IT offerings, and in particular, the different data repositories deployed by the two companies will be addressed pragmatically. The existing data delivery systems from both PI/Dwights and Petroconsultants will continue to be supported. For clients who require visibility of both datasets, loaders will be developed to move data from Petroconsultants Iris21 to PI 2000 and vice versa. This is considered to be a more realistic route than a model merger, at least for the time being. Meanwhile all future software and communications will be developed in common. Standardization issues are to be addressed too, and common naming conventions are to be developed. As a result of these two acquisitions, energy information represents IHS Group’s second largest revenue stream, after its engineering information businesses. The acquisition by IHS means that it now controls a $110 million per annum market in E&P information services with a contribution of around $70 million from the PI/Dwights group and the remaining $40 million coming from Petroconsultants. This will represent quite a hike in revenues for IHS who hitherto grossed around $440 million per annum. Both companies will report to Chris Meyer, President, COO and CFO of IHS Group, who expects "to further expand IHS Group’s activities in this arena with selected acquisitions of additional energy related information businesses."

PI/Dwights and Petroconsultants share strong sales and operating synergies. Where appropriate, each company will develop database products across common software platforms, enabling customers active in several geographic markets to manage, evaluate and exploit all exploration and production information from a single solution. Both companies will also cross-sell each others’ data products and services, combining common sales operations in Houston and the UK.

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