The turnaround of SPS highlights the Epi-V team's ability to shake up a larger established organisation and drive the change agenda at all levels. After just 15 months we'd moved the business' products up the value chain, strengthened key markets to turn around its ailing fortunes, and successfully exited through a sale to M-I Swaco (60% owned by Smith International and 40% by Schlumberger).
Members of the Epi-V team undertook a full analysis of the market including understanding drivers and dynamic competitive mapping
Background
Founded in the 1980s, SPS uses technology to plan, engineer, deliver wellbore clean-up solutions to a global customer base.
The business was majority acquired by 3i in 2000 and merged with a US competitor, but increasing competition from major service companies and a succession of ‘hired gun' CEOs contributed to declining sales and poor morale within SPS.
The investment
Members of the Epi-V team were approached by 3i to rectify the situation based on our broad industry knowledge and strong track record of repositioning and creating value.
The team became deeply immersed and immediately set about analysing what strategy would be required to turn SPS around and how best to go about achieving buy-in from the ground up.
The one hundred day plan devised looked at all aspects of the business including market dynamics, product positioning, management structure and incentives and technology portfolio as well as brand development, product positioning and geographical expansion.
The strategy
To achieve recognition of the need to change and gain buy-in for the fight back, a very high level of engagement with employees at all levels was made, together with the utilisation of strategy maps and balanced score cards. Strategy was placed at the heart of the recovery process.
A full analysis of the market was undertaken including understanding drivers and dynamic competitive mapping. The resultant strategy was a repositioning of the business and its products to provide differentiation and move its products up the customer value chain so that SPS could regain its position as the respected leader in its segment.
This approach positioned SPS as "Leaders in Wellbore Assurance".
Outcomes
Through the work done by the Epi-V team, the product centric orientation of SPS was changed to a value orientation with a clear and innovative proposition and brand. The strategy was an unmitigated success with a swift turnaround in sales driven by a motivated and focused team.
The effective repositioning of SPS' wellbore clean-up tool technology created a strong strategic fit for M-I Swaco which could see the value in combining the business with its completion and drilling fluids services to create a unique, integrated solution for clients.
The business was sold in August 2006 to M-I Swaco in a deal worth around $165 million, providing strong returns to 3i, the founders and all shareholders.
"SPS is the world leader in well-bore clean-up tool technology and M-I Swaco is the largest provider of completion and reservoir drill-in fluids around the globe. The combination of these two businesses enables us to provide customers with a unique, integrated solution."
