Industrials sector comment – October 2012

Dato

The recent sale of First Reserve’s 52% stake in UK offshore oil and gas services group Acteon to rival KKR is a real success story for the private equity sector.

First Reserve bought a 52% stake in Acteon in 2006 for £70m and over the past six years has seen operating profits quadruple. Specialised in providing subsea services, Acteon has experienced significant international growth and has benefited from a major expansion in deep-water exploration by the energy industry.

Financial details have not been disclosed but it is thought that the company is valued at £800 – £900m meaning First Reserve’s stake could have increased as much as six times.

KKR who has teamed up with US based private equity firm White Deer Energy on the deal, is one of many private equity firms turning their attention to the oil and natural gas sector with the aim of capitalising on the move to new energy sources. Last year, a consortium led by KKR bought US oil and gas company Samson Investment Company, one of the largest privately held energy companies in the United States for approx. £4.6bn.

Deals

MRI Trading AG, a subsidiary of CWT Ltd, has acquired LN Metals International Ltd, a UK based metal trading company which provides consultancy and advisory services to mining and smelting industries. The £8m transaction will enlarge MRI’s client base and geographical reach and is in line with CWT’s strategy to expand its commodity supply chain management led by MRI Group.

MRFS Group has acquired Secure Options Group Limited, a UK manufacturer and supplier of security cameras. The acquisition will enable MRFS to double its revenues and expand its business.

Wild Manufacturing Group Ltd has acquired bfl Feinstanzteile GmbH, a German based automotive component manufacturer. The transaction will enable Wild Manufacturing to expand its geographical reach in the European market and to improve its fine blanking capacity and capability.

US based private equity firm The Watermill Group has acquired Fine Tubes Ltd, a UK based designer and manufacturer of metal tubes and Superior Tube Company Inc, a US based manufacturer of metal tubes. The acquisition is in line with Watermill’s expansion strategy in the sector and will enable Fine Tubes and Superior Tubes to develop their production capacity.

Acona Holdings SA has acquired Fraser Offshore Ltd, a UK based provider of well engineering, designing and drilling services. The acquisition will strengthen Acona’s position in the European market in well planning operations.

Intertek Group plc has acquired NDT Services Ltd, a UK based provider of non-destructive testing (NDT) services to the aerospace, power and petrochemical sectors, for £17m. NDT Services will be integrated in to Intertek’s Industry & Assurance division and will enable Intertek to offer a complete NDT technical services proposition to its oil, gas, petrochemical and power customers.

The Heads of the Valleys Development Company Ltd has acquired FTR Moto Ltd, a UK based manufacturer of Grand Prix motorcycles. The Heads of the Valley Development Company intends to make Wales one of Europe’s premier motor sport locations.

Evraz plc has acquired two metal recycling assets from Sims Metal Management Ltd, located in Denver and Colorado Springs. The scrap yards will become part of Evraz Recycling, a division of Evraz North America and will support the company in their goal to optimise steel mill input costs.

US based private equity firm The Martland Holdings LLC has acquired Aylesford Newsprint Holdings Ltd, a newspaper printer supplying the major national newspaper groups in the UK from Mondi Group and Svenska Cellulosa Aktiebolaget. The Martland Holdings focuses on acquiring non-core divisions of business. The disposal means that Mondi can continue to focus on its core businesses.

Private equity firm Kohlberg Kravis Roberts & Co. LP has acquired a 52% stake in Acteon Group Ltd, a UK oil services company. The transaction provides an exit for First Reserve Corporation.

US based private equity firm The Sterling Group LP has agreed to acquire certain indirect subsidiaries of Pinafore Holdings BV, that comprises the company’s Dexter Axle business, from Tomkins Ltd for approximately £223m. The Dexter Axle business manufactures trailer axles, brake and suspension assemblies and related replacement parts and components.

Snam SpA and Fluxys SA have completed the acquisition of E.ON’s stake in Interconnector (UK) Ltd, the owner and operator of the subsea gas pipeline between the UK and Belgium. The acquisition is a new step forward in the joint approach of Fluxys and Snam to actively promote further integration of gas markets in Europe and facilitate cross-border trade and flows in both directions between the UK and Italy.

Alstom SA has agreed to acquire Tidal Generation Ltd, a subsidiary of Rolls Royce plc, specialised in the design and manufacture of tidal stream turbines. The acquisition reinforces Alstom’s position in renewable power and gives the company the capacity to build a complete portfolio of tidal products and technologies.

The ASCO Group Ltd has acquired three oilfield service companies in Canada: EJR Trucking Inc, Manatokan Oilfield Logistics Ltd and Docktor Oilfield Transport Corporation. The acquisitions significantly increase ASCO’s capacity in Canada and support the group’s international growth plans.

Curtiss-Wright Corporation has agreed to acquire PG Drives Technology Inc, a designer and manufacturer of highly engineered controllers and drivers used in advanced electric-powered industrial and medical vehicles, from Spirent Communications plc. The acquisition will strengthen Curtiss-Wright’s existing industrial controls business and provide growth in a new direction with a strong presence in the rapidly growing electric vehicle market.

John Wood Group plc has acquired Mitchell’s Oil Field Services Inc, a provider of maintenance, installation and fabrication services in the oil-rich Bakken shale region for an initial consideration of £83m. The acquisition will complement Wood Group PSN’s existing operations and maintenance, construction supervision and survey services in the region.

The Canadian Pension Plan Investment Board and Onex Corporation of Canada have agreed to purchase certain indirect subsidiaries of Pinafore Holdings BV that comprises the company’s air distribution division, from Tomkins Ltd for approximately £679m. CPPIB and Onex already own Tomkins but it is thought that the spin-off of the air-distribution arm will enable the parent group to pay off a greater amount of debt.

Genesis Oil and Gas Consultants Ltd has agreed to acquire Suporte Consultoria e Projetos Ltda, a Brazilian pipeline and structural engineering company. The acquisition will enhance the position of Genesis in Brazil which has one of the fastest growing oil and gas markets in the world.

DCC plc has agreed to acquire BP Gas Nederland BV, BP’s liquefied petroleum gas distribution business in the Netherlands, together with the trade and assets of BP’s smaller LPG distribution business in north Belgium for £20m. The acquisition follows the recently announced acquisition by DCC of BP’s LPG distribution business in Britain and the Statoil Fuel & Retail LPG distribution businesses in Norway and Sweden.

Amec plc has agreed to acquire a 50% stake in Kromax Engenharia Ltda, a Brazilian offshore oil and gas and marine engineering company for £8m. The acquisition supports AMEC’s Vision 2015 strategy to develop fully integrated service capabilities in Brazil.

Sustainable Building Solutions (UK) Ltd has acquired Permarock Products Ltd, a UK manufacturer of external wall insulation. The transaction represents a disposal for Carillion Energy Services and was not seen as core to the Carillion business.

Independent Parts and Service Ltd has agreed to merge its European operations with Access Platform Sales Ltd to create the largest independent full service distributor of powered access in the UK. The combined strength of both firms will create a true distribution organisation for powered access in the UK with further potential in Europe.

Britdoors Group Ltd has acquired the composite doors business of Grouphomesafe Ltd. The disposal follows a strategic review of the business whereby the composite door business was no longer deemed to be a good fit with the rest of Grouphomesafe’s portfolio.

The Prysmian Group has agreed to acquire Global Marine Systems Energy Limited, an installer of submarine power cables and systems for £42m. The acquisition is in line with Prysmian’s strategy to focus investments to achieve growth in higher value-added businesses and gives Prysmian tighter control over the supply chain.

NVM Private Equity Ltd has completed the management buy-out of Silverwing (UK) Ltd, a manufacturer of Non Destructive Testing (NDT) solutions which inspect storage tanks, vessels and pipework for corrosion and wall loss for the petrochemical industry. The backing from NVM will enable Silverwing to develop integrated solutions and meet the needs of a range of corrosion mapping applications.

Petrofac Ltd has acquired KW Ltd, a high-end subsea pipeline consulting and engineering services business. The acquisition complements Petrofac’s existing engineering service skills whilst adding valuable subsea capability and will be integrated in to Petrofac’s Engineering & Consulting Services business.