OMERS Private Equity, the private equity arm of Canadian pension OMERS, will acquire V.Group, a service provider for tankers, yachts and other shipping vessels, from UK private equity firm Exponent in a deal worth $520 million.
Exponent, which acquired V.Group for an enterprise value of $338 million in 2007, declined to provide further financial details on the deal.
OMERS Private Equity’s purchase of V.Group underscores the group’s commitment to eventually allocate 80 percent of its portfolio in direct investments and 20 percent in fund investments. With V.Group, 45 percent of the pension’s $5.7 billion private equity portfolio is now in direct investments, said a source close to the firm.
The group's infrastructure arm, Borealis, has long been a direct investor in Europe's infrastructure markets.
The transaction also marks the $53 billion pension’s first European buyout. In September 2009 the group hired former 3i buyout partner Mark Redman to lead its European private equity activities after opening a London office one year prior to boost its direct investing capabilities. OMERS Private Equity, which includes the group’s direct assets and fund interests, had 14 percent of its portfolio allocated to Europe, according to the group’s 2010 earnings report.
The V.group deal mark’s the London office’s second investment. It made a minority stake in Haymarket Financial, a commercial lender, in November 2009. A separate source close to OMERS said the London team’s relatively slow deal pace was a result of careful due diligence and investment selection. “With a pension parent the office can afford to take the long-view in identifying profitable and growth-oriented companies”, the source said.
OMERS intends to use the pension’s “significant financial resources and extensive international network to support [V.Group’s] strategy for organic and acquisitive growth, particularly in emerging markets”, said Redman in a statement.
V.Group currently operates across 34 countries and employs 1,800 shore-based staff across an international network of 70 offices.
Financing for the deal will be provided by RBC Capital Markets. Weil, Gotshal & Manges acted as legal counsel for the Canadian pension while Exponent was advised by Allen & Overy.