Aibel, a provider of upstream oil and gas production facilities, has been sold by a private equity consortium comprising 3i, Candover and JPMorgan Partners in a €670m secondary buyout.
From new build to decommission, Aibel maintains, modifies and operates onshore and offshore oil and gas production facilities. The business generated about US$1.5bn in sales in 2006 and employs more than 7,000 people across 16 countries.
The sale is part of a disposal strategy for Vetco International by the private equity consortium, which acquired the oil and gas group from Swiss engineering business ABB in January 2004 for about €729m, with the three providing €331m in equity. Two refinancings, in March and December 2005, have already returned cash to the consortium.
The consortium is understood to have made around 3.5 times its money in the January sale of Vetco Gray, an equipment provider to the oil and gas sector, to General Electric for €1.5bn. A flotation of the entire Vetco portfolio had been considered and a flotation of the remaining Aibel unit was mooted at the time of the Vetco Gray exit.
Following the Aibel refinancings, Candover said in its 2006 results that it had returned 1.1 times its original investment. The firm had originally approached Vetco regarding a buyout two years prior to the consortium’s successful offer. Candover was not available to comment on the Aibel sale.
Ferd made the Aibel investment through its second fund, which closed last October with just over €500m of commitments, Norway’s largest buyout fund to date. The fund has already purchased a majority stake in Nille, a Norwegian discount chain and wholesaler.
3i has a long-term interest in the oil and gas sector, with more than 40 investments at a total value of about US$1bn across the UK, the US, Norway and Singapore.
Significant investments include Specialised Petroleum Services, a Scottish well-bore clean-up products business sold to US-based M-I Swaco for US$165m in August last year; CH4 Energy, a UK oil and gas business, sold in the same week in August to Venture Productions for €224m; EDP, an oilfield development project manager; Epcon Offshore, a Norwegian supplier of water treatment systems; and Salamander Energy, which is focused on South-East Asia.
Candover’s previous oil and gas experience includes Expro International, acquired in 1992 and floated in 1995, as well as Halliburton unit Wellstream, purchased in 2003 for about €123m, with debt provided by Bank of Scotland.
JPMorgan Partners has made more than 50 investments in the oil and gas sector, and more than US$1.2bn in energy sector investments in total, including R&B Falcon, Encore Energy, Bill Barrett Corporation and Carrizo Oil and Gas.
By Robert Venes