Gulf private equity snaps up Roxar
Sees substantial growth as oil operators maximise oil and gas reservoirs
Posted: 14 February 2006
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The private equity arm of Arcapita, the Bahrain-based investment bank, along with affiliates and existing management, has acquired Norway ’s Roxar, a leading provider of services and equipment to the oil and gas industry.
 The total transaction value was approximately $200 million, Arcapita’s largest corporate investment in Europe to date. The move comes as more Gulf-based companies are looking to spend their petrodollars.
Royal Bank of Scotland and Barclays Bank provided senior and mezzanine financing of $91 million for the acquisition, together with a $25 million working capital facility.
The acquisition of Roxar forms part of Arcapita’s strategy of maintaining a diversified portfolio of assets that generate superior risk-adjusted returns.
With head offices in Stavanger , Norway , Roxar supplies products and services that enable oil and gas companies to develop fields more cost efficiently, maximise reservoir performance and improve recovery rates.
The senior management team of Roxar which is headed by Sandy Esslemont, Chief Executive Officer, will retain a shareholding of 1.2 per cent in the company.
Roxar’s customer base includes 200 of the largest national and international oil companies in the world including Saudi Aramco, ExxonMobil, BP, Norsk Hydro, Petróleos de Venezuela, Petronas, ConocoPhilips, Shell and Statoil.
As proven reserves decline, these companies, in line with the industry overall, are turning to advanced solutions such as Roxar’s to improve their rates of recovery from existing and newly discovered oil and gas reserves.
Mounzer A. Nasr, Executive Director of Arcapita and head of Corporate Investment in Europe , said: “Roxar is a clear technology leader in the products and services it provides to the oil and gas industry around the world.
“We see substantial growth opportunities as oil operators embrace new ways of maximising their returns from oil and gas reservoirs and implement reservoir management techniques earlier in the production cycle.
“As the worldwide demand for oil increases and producers experience supply constraints, operators will focus attention on their ability to maximise the production potential and recovery rates from existing fields and to realise higher returns from new discoveries. We believe Roxar is well positioned to take advantage of this growing trend.”
Sandy Esslemont said: “The fundamentals for our markets - particularly in the areas of sub-sea, multiphase metering and 3D reservoir modelling - have never been stronger and continue to improve further.
“The ownership by Arcapita gives us the support of a formidable financial partner that will help us develop our competitive position in these markets even further and increase our ability to research and invest in the oil and gas technologies of the future.”
The Roxar transaction brings to 51 the total number of corporate, real-estate and asset-based investments made by Arcapita to date, with a total transaction value of over $10.7 billion in seven years.
Arcapita Bank operates out of three offices in Bahrain , Atlanta and London and employs 172 people. Arcapita has a balance sheet of $1.9 billion and an equity capital base of approximately $400 million. Nearly 10 per cent of the bank’s capital is held by more 180 prominent individuals and institutions mostly from the Gulf region
Roxar’s head office is in Stavanger and employs close to 500 staff across a network of wholly owned offices in Europe , the Americas , Africa , CIS, Asia Pacific and the Middle East .
The company generated revenues of approximately $120 million in 2005. Roxar Group was previously 100% owned by Lisme - a holding company owned 51 per cent by Lime Rock Partners, a US private equity firm, and 43 per cent by Smedvig, a Norwegian offshore drilling contractor.
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