The green shoots of recovery that were widely spoken about within M&A (Merger & Acquisition) circles at the beginning of the year appear to have continued to gather momentum as the recent market stability in the energy sector encourages a more positive environment in which to undertake M&A activity.
Recent transactions, particularly in the second half of the year, by private equity firms has seen a welcome uptake in deal activity. Notable transactions include the recently announced management buyout of metal recycling and decommissioning specialists John Lawrie Group supported by Rubicon Partners and Grovepoint, Craig Group’s disposal of ERRV specialist North Star Shipping to Basalt Infrastructure Partners, the buyout of waste management specialists TWMA by Buckthorn Capital and EV’s investment in the offshore engineering firm Aquaterra Energy which are all positive signs that confidence is returning.
In addition we have seen large, cash-rich multinational service companies, having taken stock of their own businesses, remain acquisitive throughout 2017 as they seek to expand their current service offering, technical capabilities and/or geographical presence. A prime example of this being Wood’s £2.2billion acquisition of Amec Foster Wheeler and subsequent divestment of Amec’s North Sea assets to Australian engineering group Worley Parsons for £228million.
Technology and innovation continues to be prominent in the decision making of acquirers. Often targets who have coverage in both the capex and opex budgets of the supply chain have been of interest as trade buyers continue to establish greater presence in both camps. This has been highlighted following the merger of Technip and FMC in January 2017 with the combined group recently completing the acquisition of the Wellhead exploration & equipment services business for jack-up applications from Plexus Holdings plc.
Collaboration has been a buzzword often used across the industry and there are signs that barriers continue to be broken most notably in Harran’s recent strategic collaboration with OEG Offshore to offer “a combined rental, product and service offering to enable each company’s customers to benefit from a wider range of equipment and services”.
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