Houston oil and gas drilling products provider National Oilwell Varco Inc.
(NYSE:NOV) has been on an acquisition tear. Over the past 10 years, it has bought 160 companies, including the $7.3 billion purchase of Grant Prideco Inc. in 2007.
So is the company slowing down given lower commodity prices and rocky economic times? Not exactly. Pete Miller, chief executive of National Oilwell Varco, told a packed room at a Houston Strategic Forum luncheon on Thursday that his company is actively scouting for targets. His reasoning: That oil and gas is going to continue to be harder and harder to find, which will force oil and gas prices back up in the near future. "We're going to have peak oil," he said. "The question is when."
Specifically, Miller said he's looking for companies that have products he can put into National Oilwell Varco's sales machine. "[Warren] Buffett says to be greedy when other people are fearful," he said. "We have a good balance sheet, and we'll continue to buy companies."
After his presentation, Miller told The Deal he's targeting prospects in Russia, the Middle East and South America, where he expect most of the oil and gas drilling action to happen in the future and where he needs local talent. As he told the crowd, "If you do oil and gas here, you're in trouble. If you do oil and gas worldwide, you'll do fine."
Miller said the key to a successful acquisition is strategy and execution. "People spend too much time on valuation and not enough time on strategy and execution," he said, noting that the company's first merger conversation with Varco International Inc. was in 1998, and it didn't do the deal until 2004. "We were patient with them."
To make acquisitions work, Miller advised starting the integration process early, be clear on the non-negotiables ("If you want to run your own books, don't sell to us," he warned), keep people engaged, have a sense of urgency and do follow-up. "We critique ourselves to see what we can do better." -
Claire Poole
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