Don Stowers, Editor, OGFJ
London-based Arcapita Limited, the European private equity arm of Arcapita Bank BSC, an international investment firm headquartered in Bahrain, has with its affiliates and existing management completed the acquisition of a 100% interest in Roxar AS, a provider of technology services and equipment to the oil and gas industry.
The total transaction is valued at about $200 million (US dollars) and represents Arcapita’s largest corporate investment in Europe to date. Royal Bank of Scotland and Barclays Bank provided senior and mezzanine financing in the amount of US$91 million for the acquisition, together with a US$25 million working capital facility.
With its headquarters in Stavanger, Norway, Roxar supplies products and services that enable oil and gas companies to develop fields in a cost-efficient manner, maximize reservoir performance, and improve recovery rates. The senior management team of Roxar, headed by Sandy Esslemont, CEO, will retain a 1.2% stake in the company.
Esslemont noted that the senior management team, with the exception of the CFO, will remain intact. Arcapita prefers to bring in its own CFO, he noted. The makeup of the board of directors will change as well, but the board composition had not yet been determined as this issue of OGFJ went to press.
“The transaction will allow us to better integrate our reservoir management software with our production hardware, including subsea, multi-phase metering, and downhole,” said Esslemont. “Today we are offering bits and pieces of the e-field development, but the acquisition, which is essentially a refinancing, will enable us to start this integration sooner and complete it more quickly.”
Esslemont noted that Roxar, which he says has been growing at a rate of 25% to 30% annually, is very product-oriented today, but the acquisition will enable the company to become more service-centered and perform more consulting-type work.
“From a technology standpoint, we will begin to merge our subsea and surface component with our downhole completion technology,” he added.
Mounzer A. Nasr, executive director of Arcapita and head of corporate investment in Europe, commented: “We see substantial growth opportunities as oil operators embrace new ways of maximizing their returns from oil and gas reservoirs and implement reservoir management techniques earlier in the production cycle.”
“With its market-leading position, proprietary technology, and strong international management team, we believe Roxar is well positioned to take advantage of this growing trend,” said Nasr.
Esslemont added, “The ownership by Arcapita gives us the support of a formidable financial partner that will help us develop our competitive position in these markets even further and increase our ability to research and invest in the oil and gas technologies of the future.”
Roxar’s customer base includes 200 of the largest national and international oil companies in the world, including Saudi Aramco, ExxonMobil, BP, Norsk Hydro, PDVSA, Petronas, ConocoPhillips, Shell, and Statoil.OGFJ
