Private equity house Arle Capital is said to be close to selling Dutch engineering firm Stork Technical Services for around £440million, reports have claimed.
Speculation emerged in June speculated in June that Arle would flog off the asset integrity specialist and that possible buyers could include CVC Capital Partners, Clayton Dubilier & Rice and EQT Partners AB.
Financieele Daglad, a Dutch business paper, has this month reiterated the speculation, adding Bain to the list of possible suitors to the company, which accounts for thousands of North Sea-related jobs.
The Press and Journal has since been advised by a key player in the upstream oil & gas private equity circuit that Stork is up for disposal and that Greenhill of London has been retained to handle the sale.
The pressure on Arle to achieve a sale is rising as many private equity players are struggling to achieve the returns they had been designed to achieve. It acquired Stork in 2010 from the Carlyle Group.
Whoever buys the business will be looking for savings and this could threaten jobs at the company, which employs thousands in Aberdeen out of a total global workforce or around 13,400.
In May, the group disclosed that it was culling its UK-based workforce by around 120, blaming “challenging conditions” in the offshore market, since when cost-cutting pressures have further intensified.
Stork said in August that market conditions in the UK would remain challenging following the restructuring of its operations in Aberdeen to reflect the downturn in the North Sea.
The Dutch multi-national reported that solid revenue development in Colombia and a good performance in Europe had offset the UK difficulties and contributed to a pre-tax profit of £32million (43.5million euros), up from £25.6million (34.8million euros) in the first half of last year.
Revenue also increased to £550million (745million euros) from £505million (685million euros) in 2014.
Chief executive Arnold Steenbakker admitted: “In the UK, market conditions will remain challenging. We have restructured our operation in Aberdeen responding to the deferred demand for our services.”
The current oil crisis is powering consolidation in the oil & gas supply chain, plus precipitating a growing number of bankruptcies. The largest deal by far so far is the £22billion merger between Halliburton and Baker Hughes.
Stork built its Granite City presence via its acquisitions of Iicorr in April 2006 “bringing size, security and a global network” to the business. In 2012 it bought RBG in a deal believed to be worth up to £250million and bringing in 4,900 employees.
RBG itself had been formed from a merger in 2004 of three other North Sea companies – Rigblast, MESL (3i portfolio companies) and Mach-Ten.
Its UK activities at the time included the deepwater facility at Invergordon in Easter Ross and operations in Aberdeen, Liverpool, Humberside and Tees-side.
Its next biggest operations were in Azerbaijan and Kazakhstan, with more than 800 employees, and Trinidad & Tobago.
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