Private Equity News & Analysis

3i announces oil sector double

The global venture capital firm has announced the purchase of a 50 percent stake in oil service newco RBGltd, and a €3.1m investment in Norwegian water treatment company Epcon Offshore.

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3i will take a 50 percent stake in RBGltd, a new company valued at £52 million (€75 million, $99 million) that is being formed from the merger of three oil industry businesses. Bank of Scotland is providing debt facilities for the deal.
 
3i is already a major shareholder in two of the constituent companies, Fallsky Ltd, the holding company of manpower and rig/vessel repair company Macgregor Energy Services Ltd (MESL), and Rigblast Group Ltd, which provides maintenance and support services.
 
The third company, machining and inspection company Mach-Ten Offshore Ltd, is owned by engineering conglomerate Ashley Group, which will hold the remaining 50 percent of the new company.
 
RBGltd is expected to have turnover of £175 million and will provide planning, construction, ongoing operations and decommissioning services to the oil and gas market. It will also serve the civil, defence, marine and commercial sectors.
 
The company will be headquartered in Aberdeen, Scotland, and will have a presence throughout the UK and US, in Mexico, Trinidad, Italy, Baku, Kazakhstan, Qatar, India and Saudi Arabia. Rigblast chief executive Richard Ellis retains that position in the newco.
 
3i has also announced that it is investing NOK25.5 million (€3.1 million, $4.1 million) in Norwegian oil service company Epcon Offshore. It is investing alongside existing shareholders and management, but has not disclosed what stake it will hold in the company.
 
Epcon Offshore designs and manufactures products such as the Compact Flotation Unit, which removes oil and gas from water before discharging it back into the sea. The company's market is driven by tightening international environmental standards, and its customers include oil companies in Norway, the UK and Brazil. 
 
Epcon says it will use the injection of funds to strengthen its market position and fund international expansion.
 
3i’s investment portfolio includes more than 40 companies in the exploration and production (E&P) and service sectors. It claims to have funded almost a quarter of European oil & gas private equity deals in the last three years.