SLR, an environmental consultancy – in which 3i owns a 29.5% stake – has bought CCA Environmental, according to a statement. Cape Town-based CCA provides environmental impact assessments to the oil and gas industries, and to the South African infrastructure sector.
Its clients include Shell, Total and Exxon. CCA, which is mostly employee-owned, also participates in infrastructure projects for public agencies. The deal is SLR’s 16th bolt-on since 3i’s investment in 2008. It comes amid expectations of an uptick in oil and gas-related deal activity.
In May, EY published a survey of oil and gas executives globally about their confidence in the industry. It that found deal volumes in the sector were expected to increase in the next 12 months, the deal pipeline was expected to grow and bolt-on acquisitions were favoured over so-called transformative deals. The survey also showed 91% of respondents viewed the global economy as stable or improving, up slightly from October 2013.
Michelle Le Merre, a director at advisory firm DC Advisory, said, “Within the mid-market, out of all the sub sectors we cover in industrials, there is a large number of oil and gas transactions in comparison with broader industrial deals.”
“One of the themes is around getting greater amounts of oil and gas out of the current reserves – it is about well intervention and maintenance to extract more out of what we currently have.
“Financial investors are looking for more stability of revenues… and like businesses linked to production rates and consumable products and not just new rig builds.”
The value of oil and gas sector-related private equity deals globally so far this year has already surpassed the whole of last year, according to data provider Dealogic. Since January firms have agreed 31 deals worth a total of $6.7bn, compared with 48 deals worth a combined $6.2bn in the whole of last year.
However, last year the number of deals slumped to the lowest level since 2009 when firms agreed 30 deals worth a combined $2.7bn.
The deal for CCA is the second private equity-backed oil and gas deal announced in Europe in two days. Yesterday Kohlberg Kravis Roberts bought UK oil and gas industry equipment provider OEG Offshore Group. The deal’s enterprise value remained undisclosed but a person familiar with the matter said the equity investment was more than £100m.
[Source: Financial News]