Norway’s Reiten triples money on oil services platform

The Oslo-based mid-market investor has made more than 3x its original investment on the sale of a Norwegian oil services company.

Norwegian private equity firm Reiten & Co (Reiten) has made its third divestment from its RCP V fund this year, with the sale of Plugging Specialist International (PSI) to US trade buyer T. D. Williamson for NOK444 million (€57 million; $68.5 million).

Reiten initially acquired a 43 percent stake in PSI in 2003 through RCP V, which closed in January 2002 on NOK500 million. The stake was then increased to 53 percent in 2005.

Private equity is still quite new in Norway, but I think that the market is realising that it can help companies develop.

Bard Brath Ingero, partner and director, Reiten & Co.

According to Bård Brath Ingerø, partner and director at Reiten, the sale generated 3.3 times Reiten’s original investment, but an earn-out option will provide “additional payments if the company develops well over the next three years”.

Founded in Stavanger, Norway, in 1999, PSI is a supplier of products and services for construction, maintenance, pressure isolation and flood prevention in pipelines.

So far this year, Reiten has exited three of RCP V’s investments. In June, it sold EuroProcessing International (EPI) to First Data Corporation of the US for €100 million, and property investment firm Heimstaden to Fredensborg Eiendomsselskap for Skr1.9 billion (€198 million; $238 million) in September.

Ingerø said that RCP V is fully invested and has returned about two times its money to investors. The fund has one remaining undivested asset, but Ingerø is not expecting a sale in the immediate future. “We have several proposals on that investment, but we’re not looking at selling at the moment, as we still have some further building to do.”

Norway is providing a good environment for private equity currently, said Ingerø, adding that “we now see a trend of growing deal flow from investment banks”, while a generational shift in family-owned businesses has provided opportunities for change of ownership.

“Private equity is still quite new in Norway, but I think that the market is realising that it can help companies develop,” noted Ingerø. “In the 1990s, we saw a lot of companies go to the stock exchange and falter far too early. That has changed as we see more companies partnering with private equity firms before eventually going for an IPO.”

Oslo-based Reiten has a total of €220 million under management, and targets equity investment opportunities between €10 million and €40 million.