Investcorp seals second oil and gas deal this year

The Bahrain-based firm's latest energy deal is for ATYB, a technical support service business for the oil and gas sector in Saudi Arabia and Qatar.

Investcorp's $1 billion 'Gulf Opportunity Fund'  will pay an undisclosed amount for a 38 percent stake in Al Yusr Industrial Contacting Company (AYTB), an oil and gas services company in Saudi Arabia and Qatar. 

AYTB, founded in 1979, provides industrial, technical, and logistical support services, including operations and maintenance services for the oil and gas sector. AYTB’s clients include many of the region’s petrochemical and oil and gas companies. The business employs over 4000 people across its operations in Saudi Arabia and Qatar. 

“Saudi Arabia is currently experiencing a boom in industrial growth and … we believe AYTB has excellent growth prospects given the continuing increase for demand in services in the petrochemical, oil and gas, power, water desalination, heavy industrial and mining sectors,” Mohammed Al-Shroogi, president of Investcorp’s Gulf activities, said in a statement. 

The macro fundamentals are very strong and this is one of the reasons why Investcorp and its LPs are bullish on the outlook of the [oil and gas] sector

Hazem Ben-Gacem

The acquisition marks Investcorp’s second deal in the oil services sector so far this year. 

In February, the firm acquired Hydrasun, a provider of fluid control equipment and solutions for the oil and gas sector, from Equistone Partners Europe. Following that investment, Investcorp's Gulf Opportunity Fund was more than 70 percent deployed, Hazem Ben-Gacem, Investcorp’s head of European corporate investments activities, said at the time, adding that the firm was likely to raise a successor fund. 

“I think we have a lot of appetite and interest from our investors for private equity investments in new emerging markets, outside Europe and North America. We will probably continue that initiative [in the Gulf], but also expand beyond the Middle East into Turkey and maybe Central Asia,” he said.  

In another recent interview, Ben-Gacem told PEI the service sector in the oil and gas space is an attractive market that will continue to be one of Investcorp’s core sectors. “The macro fundamentals are very strong and this is one of the reasons why Investcorp and its LPs are bullish on the outlook of the sector. There’s a long term energy demand and that demand is set to grow, particularly in the non-OECD countries. As importantly, there’s a lot of talk about alternative energy and different sources, but the reality is that the most significant source of energy for the next generation will continue to be oil and gas,” he said.