3i Group has reportedly struck a deal to sell oil services firm RBG to Montagu Private Equity for £200m.
Scotland-based RBG is one of the largest remaining independent UK-based oil and gas services companies, and holds a “significant” share of the UK North Sea fabric maintenance market, according to the company’s web site. The business also has operations in Trinidad, the Gulf of Mexico and the Caspian Sea.
3i was not immediately available at press time. Montagu declined to comment.
RBG was created by 3i in late 2004 through the merger of oil businesses Rigblast, McGregor Offshore and Mach-ten. The firm had already invested in two of the businesses.
3i reported strong performance for the first half of 2010 due to the listed firm’s portfolio companies taking on “tough decisions” in the stagnant markets to find growth and cut costs, the firm’s chief executive Michael Queen said in an earnings report released last week.
3i reported positive results for the sixth-month period ending 30 September, showing a 3.8 percent total return for the first half of the year, up slightly from the 3.2 percent return for the same time period last year, and an increased investment pace.
Last month, 3i sold MWM, a Germany-based manufacturer of combustion engines, to US-based construction equipment provider Caterpillar for about £490 million. The deal represented a 2.2x return on the original investment and an IRR of approximately 25 percent.
Montagu Private Equity is targeting approximately £1.7 billion for its fourth fund, with a hard-cap of about £2.1 billion. As of mid-October, the firm was approaching the 75 percent invested threshold for its third fund, which closed on roughly £2 billion in 2005.