Energy-focused private equity firm Riverstone Holdings has agreed a C$1.3 billion ($1.2 billion, €804 million) deal to acquire oil refiner Gibson Energy from London-based oil firm Hunting.
The Carlyle Group energy affiliate has already paid a deposit of C$100 million on the deal, which includes a C$170 million payment for Gibson’s net working capital. Riverstone is making the investment from the Riverstone/Carlyle Global Energy and Power Funds.
The total payment represents a multiple of just less than 13 times Gibson’s profit from operations last year.
Alberta, Canada-based Gibson owns and operates 11 oil and 49 propane distribution terminals, as well as roughly 290 miles of pipelines and 3.4 million barrels of tank storage throughout northwest Canada. Gibson also counts among its assets Moose Jaw Refinery, which processes roughly 3.9 million barrels of heavy crude each year.
Gibson chief executive Terry Gomke is expected to have an ongoing role with the company and be offered an equity stake in the divestiture, according to a statement from Hunting.
In 2006, Carlyle and Riverstone’s third fund purchased Niska Gas Storage, another Alberta-based midstream oil company. Niska specialises in natural gas storage.