Anderson Anderson & Brown Corporate Finance is delighted to share with you our quarterly Deals+ update for Q1 2020 in conjunction with Energy Voice, highlighting selected oil and gas mergers and acquisitions and fundraising transactions across the UK.
With the COVID-19 pandemic wreaking havoc, financial markets faltering and a geo-political oil price war unfolding, it is clear that we are in unprecedented times that are proving far more sinister than could ever have been imagined at the beginning of 2020. The damaging price war between Saudi Arabia and Russia plus increased OPEC production (despite a global reduction in demand) have all forced undue pressure on global equity and commodity markets, squeezing majors and independents with Brent Crude trading at decade lows of c.$20 p.b.
From a mergers and acquisitions perspective, activity has slowed as the equity markets continue to assess the impact of the pandemic while businesses focus on conserving cash and tapping liquidity in the short-term. We expect to see creative and innovative deal structures continue in the upstream market where crippling CAPEX budgets and shrinking cash-flows will force a wave of consolidation, with many expected to struggle in this unchartered environment.
Despite the strong headwinds presented in recent weeks, the trend of majors divesting of non-core assets continued in Q1 2020, with deals including Premier Oil’s £475 million acquisition of BP’s interests in the Shearwater and Andrew fields in the North Sea.
Oilfield service providers continue to feel the pinch of the oil price slump with margins under pressure and wider supply-chain OPEX cuts eating into revenues. Despite this, deals were still being done in Q1 2020 where acquirers sought to widen their technology offering. For example, Hunting’s £28 million acquisition of production optimisation specialist, Enpro Subsea, from EV Private Equity, and James Fisher’s acquisition of Maven-backed diving specialist, Fathom Systems.
Mergers and acquisitions
| SOLD | BUYER | DESCRIPTION |
| Toscana Energy Income Corporation | i3 Energy Plc | i3 Energy Plc, Eastleigh, England, which invests in near-term producing oil & gas assets, primarily in the North Sea, entered into an option agreement to acquire all issued and outstanding common shares of Toscana Energy Income Corp, Alberta, Canada, which owns and operates oil & natural gas assets in the Western Canadian Sedimentary Basin (WCSB).
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| NORM Solutions Ltd | ASCO Group Holdings Ltd | ASCO Group Holdings Ltd, Aberdeen, Scotland, a global integrated materials and logistics management company, has acquired NORM Solutions Ltd, Aberdeen, Scotland, which specialises in the receipt and decontamination of naturally occurring radioactive material. Terms not disclosed.
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| Fathom Systems Ltd | JFD Ltd | JFD Ltd, Aberdeen, Scotland, which manufactures underwater equipment, a subsidiary of James Fisher and Sons Plc, Cumbria, England, provider of marine engineering services, has acquired Fathom Systems Ltd, Aberdeen, Scotland, provider of engineering solutions and products to the commercial diving industry. Terms not disclosed.
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| Subsea Fluids Group Ltd | MacDermid Canning Ltd | MacDermid Canning Ltd, Wigan, England, a manufacturer and supplier of fluids for hydraulic systems, drilling, and logging operations, a subsidiary of Platform Specialty Products Corp, Florida, USA, a producer of speciality chemicals and a provider of technical services, has acquired Subsea Fluids Group Ltd, Leigh, England, a provider of independent fluid and equipment qualification and testing services to the subsea and topside offshore oil and gas industry. Terms not disclosed.
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| Magma Products Ltd | Global Energy (Group) Ltd | Global Energy (Group) Ltd, Inverness, Scotland, providers of production integrity and drilling marine services has acquired Magma Products Ltd, Aberdeen, Scotland, providers of commissioning and completions of hydrocarbon systems. The deal further enhances Global E&C’s integrated asset lifecycle capability.
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| Enpro Subsea Ltd | Hunting Plc | Hunting Plc, registered in London, England, and headquartered in Houston, Texas, USA, which provides oil and gas services including the transportation and storage of crude oil, acquired Enpro Subsea Ltd, Aberdeen, Scotland, which develops products that enable capital efficient, future proof and flexible field development using standard subsea hardware.
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| Cargostore Worldwide Trading Ltd | MBO | Management buyout of Cargostore Worldwide Trading Ltd, London, England, which provides cargo carrying units (CCUs) to service the oil, gas and offshore renewables industries, project movers and offshore supply companies. Terms not disclosed.
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| Fotech | BP Plc | BP Plc, London, England, has acquired Fotech, Norway, a portfolio company of EV Private Equity, and a leader in distributed acoustic sensing focused on developing and deploying advanced fibre optic sensing targeting the security, smart cities and oil and gas sectors.
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| Industrial Services business of John Wood Group plc | Kaefer Isoliertechnik GmbH & Co KG | Kaefer Isoliertechnik GmbH & Co KG, Bremen, Germany, which provides industrial insulation services, acquired the industrial services business of John Wood Group Plc, Aberdeen, Scotland, which provides engineering, design and project management services to clients in the oil, gas and power industries, for a total consideration of £90.6m
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| 2G Robotics Inc | Sonardyne International Ltd | Sonardyne International Ltd, Hampshire, England, a designer and manufacturer of electronics and mechanical instruments for the offshore oil and gas industry, a subsidiary of Sonardyne Group Ltd, Hampshire, England, has acquired 2G Robotics Inc, Ontario, Canada, a producer of underwater laser scanners and imaging systems for subsea mapping, surveying, and inspection. Terms not disclosed.
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| Speedwell Energy (1) Ltd | RockRose Plc | RockRose Energy Plc, London, England, a company formed to make acquisitions of companies or businesses in the upstream oil and gas and power sector, has signed a Sales and Purchase Agreement to acquire 100% of the equity of Speedwell Energy (1) Ltd, Aberdeen, Scotland, a company that holds oil and gas assets in the UK sector of the Southern North Sea, from Speedwell Energy Ltd. Terms not disclosed.
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| Pctest Engineering Laboratory Inc | Element Materials Technology Group Ltd | Element Materials Technology Group Ltd, London, England, which provides testing, inspection and certification services to the global aerospace, transportation, fire, oil & gas and infrastructure sectors, has acquired Pctest Engineering Laboratory Inc, Columbia, Maryland, USA, which provides wireless testing and certification services. Terms not disclosed.
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| BP (stakes in Andrew & Shearwater fields) | Premier Oil | Premier Oil Plc, Aberdeen, Scotland, a leading international oil & gas exploration and production company has agreed to acquire the interests in the Andrew area in the central UK North Sea and non-operating interests in the Shearwater Field from BP Plc, Aberdeen, Scotland.
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| Tricore Ltd | EOT | An employee ownership trust has acquired Tricore Ltd, Aberdeen, Scotland, which refurbishes roller cone mill tooth and tungsten carbide insert drill bits for the global oil and gas drilling industry. Terms not disclosed
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| FUNDRAISERS
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| COMPANY | FUNDERS | DESCRIPTION |
| ROVCO Ltd | Foresight Group | ROVCO Ltd, Bristol, England, a provider of ROV and hydrographic services has successfully raised £3.9m series A funding from Foresight Williams Technology EIS Fund. The investment is part of a larger round totalling £5m which included funds from existing shareholders.
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| Xergy Ltd | Private Individuals | Xergy Ltd, Aberdeen, Scotland, a specialist oil & gas digital services platform that works as a cloud-based work management system has successfully raised £1.8m of private investment to facilitate growth plans.
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