Energy investor set to take £70m stake in Norfolk company
One of the world’s leading investors of private equity into the energy sector is on the brink of grabbing a £70 million majority stake in one of the region’s most successful offshore oil-related businesses, Acteon.The Norwich-based offshore engineering firm hopes the investment by First Reserve Corporation’s First Reserve Fund X will spark the business’ ascent through a crucial growth phase, taking it on into the emerging oil-strong markets of West Africa and South East Asia.
Since raising its initial pure buyout fund in 1992, First Reserve has completed over 60 principal transactions. Investing over £1.9 billion in equity, these transactions have delivered an aggregate total value of over £5.4bn.
Paul Alcock, Acteon’s VP, marketing & business integration, said: “The reason for engaging with First Reserve is to align us with an investment rich bank that can help secure better deals for us in the future.
“Their credibility in the market place and their huge wealth of knowledge of growing businesses in the oil and power sector is an advantage. We are strong in North America, Europe, but there are other areas in the world where oil and gas exploration is developing where we would like to roll out our products. This is one of our main focuses.”
First Reserve claims to be the oldest and largest buyout group to focus exclusively on a strategy of diversified energy investments and has over £6.7bn under management.
An independently owned firm, it has a deeply experienced management team who have been in place since its foundation in 1983.
First Reserve’s latest partnership, First Reserve Fund XI, closed with £4.2bn in July, 2006.
Acteon specialises in the subsea service and construction market and offers its customers a range of services aimed at “linking seabed to surface” over the life of an offshore project. It is involved in most of the key offshore oil and gas provinces in the world and has 600 employees worldwide.
Will Honeybourne, a First Reserve managing director, added: “This investment demonstrates our belief in the opportunities within the oilfield services sector.
“Our commitment to Acteon, in particular, was stimulated by the group’s impressive track record, its strong growth potential, and the obvious drive and ambition of its people.”
Detailed financial terms of the transaction are yet to be disclosed, though a source close to Acteon said that the First Reserve Fund X had acquired an unspecified majority stake in the company for $130m.
Contracts have been exchanged, though they need shareholder agreement bef-ore they can be finalised. Completion is expected in early November.
Richard Higham, group CEO at Acteon, said: “First Reserve’s investment represents an important vote of confidence in Acteon. I am looking forward to First Reserve’s input into our geographical expansion plans and to the further development of our already extensive product and service portfolio.
“I anticipate that First Reserve’s backing will improve our access to additional capital, which will enable the continued pace of development of the group, both organically and through further targeted acquisitions.”
Acteon’s four main areas of business are foundations and moorings, conductor systems, risers and decommissioning services – all of which are supported by an established well construction and operations skills centre.