First Reserve to Acquire Energy Infrastructure Leader from Ingersoll-Rand for $1.2 Billion

Acquisition of Dresser-Rand Underscores Firm’s Focus On Attractive Global Energy-Related Private Equity Investments

Greenwich, CT, August 25, 2004 — First Reserve Corporation, the leading private equity firm specializing in energy industry investments, announced today that it agreed to acquire the Dresser-Rand Company, a business unit of Ingersoll-Rand Company Limited (NYSE:IR) for approximately $1.2 billion. This is First Reserve’s third carve-out acquisition from a major multinational corporation in 2004 and its second billion dollar transaction in the past six months. Dresser-Rand is a leading supplier of infrastructure equipment, including compressors, turbines and engines, as well as related after-market parts and services, to the worldwide energy industry.

“Dresser-Rand is a global leader in the energy infrastructure market with excellent management, strong cash flow and growth potential,” said William E. Macaulay, Chairman and Chief Executive Officer of First Reserve. “The company’s market-leading installed base provides a strong platform to grow its business. Dresser-Rand fits perfectly within our investment strategy of acquiring leading companies serving the global energy industry.”

Herbert L. Henkel, Chairman, President and Chief Executive Officer of Ingersoll-Rand, said, “We are pleased to be working with First Reserve on this transaction, particularly given the firm’s deep experience in the global energy business. This enabled us to complete the divestiture process on a compressed timeline with a high degree of certainty.”

For more than 100 years, Olean, NY-based Dresser-Rand has been a leader in energy conversion technology, from initial concept to equipment retirement for the oil and gas, chemical, and petrochemical industries. The company designs, manufactures, sells and services a full line of energy industry-related equipment, including custom engineered centrifugal and reciprocating compressors, steam and gas turbines, and control systems under an assortment of brands: Dresser-Rand, Clark, Moore, Terry, Turbodyne, Worthington, and Ingersoll-Rand. More than half of Dresser-Rand’s 2003 revenue of approximately $1.3 billion was related to the sale of after-market parts and services, and 53% was generated outside the United States.

Dresser-Rand’s President and Chief Executive Officer Vince Volpe commented, “Since the acquisition of the business by Ingersoll-Rand in 2000, we have made tremendous progress. As an independent organization teamed with the knowledge and resources of First Reserve, we will be in an even stronger position to continue to build on our record of improving operations and enhancing our product and service offerings for clients.”

The Dresser-Rand acquisition, expected to close in the fourth quarter, will be the first investment made in First Reserve Fund X, a $2.3 billion private equity fund raised earlier this year. First Reserve’s other recent transactions include the formation of Foundation Coal Holdings, and the acquisition of Halliburton Company’s worldwide surface well testing business.

Media Contact:
Alan Katz
Cubitt Jacobs & Prosek for First Reserve Corp.
212-279-3115 ext. 211