Candover, 3i, JP Morgan sell oil company for $900m

Buyout firms Candover, 3i and JP Morgan Partners have sold oil and gas company Aibel, which the firms originally bought as part of Vetco International in 2004, to a Ferd-led investor group, as dealflow continues to be strong in the sector.

An investor group led by Norwegian buyout firm Ferd has bought oil and gas company Aibel from a consortium comprising Candover, 3i and JPMorgan Partners for $900 million (€670million).

Ferd made the acquisition from its second fund, while its partners on the deal were undisclosed.

The sale of Aibel follows the consortium’s sale of Vetco Gray to GE Oil and Gas for $1.9 billion in January this year, generating a return for the three firms of more than three times their initial investment. Both companies were originally part of Vetco International, which was acquired by the consortium from ABB Oil & Gas in July 2004 for $925 million.

Aibel provides process systems, technology, services and products for on and offshore oil and gas production facilities. The company had a $1.5 billion turnover last year and it employs 7,000 people across 16 countries.

Debt financing was provided by ABN AMRO and DnB NOR. The deal will close in August 2007, subject to competition and regulatory approval.

The sale will lead to a 16 pence per share (€0.24, $0.32) increase in the net asset value of Candover Investments, the buyout firm’s listed investment trust. The share price of the trust was up 22 pence to £20.47at 09:34 GMT today.

The deal follows last week’s sale of Canadian company CCS Income Trust for C$3.5 billion ($3.3 billion, €2.4 billion) and demonstrates that private equity interest in the oil and gas sector, which for many years was considered a private equity backwater, shows no sign of waning.