During Q3 2021 we have seen continued M&A activity within the global energy markets. A major contributing factor to this has been the price uptick of Brent Crude, jumping above $80 per barrel for the first time since October 2018.
Brent is showing no signs of reversing during Q4 2021, with the natural gas shortages incurred throughout the quarter causing an extortionate rise in US and European gas prices, all resulting in Saudi Aramco estimating the shortage has added around 500,000 barrels a day to Brent consumption.
Elsewhere, over-capacity continues to be a headwind amongst oilfield service providers pointing towards the continued need for “transformational” deals, be that carve-outs, asset sales or divestments. The growing shift towards capital-light business models will likely drive activity across the sector as consolidators actively seek bolt on acquisitions to streamline operations.
Stand-out deals in the quarter saw Ithaca Energy continue their acquisition of North Sea assets with the c.$1b purchase of Marubeni’s North Sea assets and Greencoat UK Wind Plc continuing to add to their windfarm portfolio with the acquisition of the Andershaw wind farm from Norwegian firm Statkraft AS for consideration of £121m.
Throughout Q3 2021, private equity investors and large corporates have continued their move into the renewable energy space. We have seen Edinburgh-based Nova Innovation, which develops and manufactures direct drive tidal turbines, receive £6.4m from Scottish National Investment Bank, along with our own AABcf team who advised electrical vehicle infrastructure provider FOREV in their successful raise of £2m from Scottish National Investment Bank. Furthermore, AABcf also advised on BGF’s £3.5m investment into well-bore isolation specialist Isol8, closing a busy quarter for the team.
As we head into the final quarter of the year, we continue to maintain strong positive momentum with a healthy pipeline of deal opportunities. AABcf will continue to be on the look-out for strategically compelling transactions for clients.
Mergers and Acquisitions
|Andershaw Wind Farm||Greencoat UK Wind Plc||Greencoat UK Plc, London, England, which invests in operational UK wind farms, agreed to acquire Andershaw wind farm near Douglas, Scotland, from Norwegian energy firm Statkraft AS. Consideration estimated around £121m.|
|ITP Aero||Bain Capital||Bain Capital, a private equity firm, signed a definitive agreement to acquire ITP Aero, Zamudio, Spain, which manufactures aircraft engines and turbines, from Rolls Royce Holdings Plc, London, England, manufacturer and supplier of gas turbine engines and power generation systems for the civil and defence aerospace, marine and energy sectors. The deal has an enterprise value of approximately €1.8bn.|
|Marubeni’s North Sea Assets||Ithaca Energy||Ithaca Energy agreed to acquire Marubeni’s North Sea’s assets which are mainly oil and gas for around £1bn. Ithaca Energy is a subsidiary of Israeli firm Delek Group Limited based in London, England.|
|Babcock International Group Plc||CHC Group LLC||CHC Group LLC, British Columbia, Canada, a helicopter services company, acquired the oil and gas business of Babcock International Group Plc, London, England, which provides engineering support services to the defence, energy, telecommunications, transport and education sectors. The oil and gas business is based in Aberdeen and provides offshore oil and gas crew transportation services in the UK, Denmark and Australia. Consideration was £10m in cash.|
|Imserv Europe Ltd||Blue Water Energy LLP||Specialist private equity firm Blue Water Energy LLP, acquired IMServ Europe Ltd, registered in Telford, Shropshire, trading from Milton Keynes, Buckinghamshire, England, a provider of smart metering technology and data for the industrial, commercial, and domestic electricity sectors, from Schneider Electric SE, Rueil Malmaison, Ile-de-France, France, a manufacturer of electrical distribution and industrial engineering equipment. Terms not disclosed.
manufacturer of electrical distribution and industrial engineering equipment. Terms not disclosed.
|Smarter Grid Solutions Ltd (SGS)||Mitsubishi Electric Corp||Mitsubishi Electric Corp, Tokyo, Japan, a researcher, manufacturer and marketer of electrical and electronic equipment entered into an agreement to acquire Smarter Grid Solutions Ltd (SGS), Glasgow, Scotland, a provider of distributed energy resources (DER) management software for power distribution utilities and DER operators. Terms not disclosed.|
|Pyebridge Power Ltd||Mast Energy Developments Plc||Mast Energy Developments Plc, London, England, a multi-asset operator in the Reserve Power market, acquired Pyebridge Power Ltd, Cmbridgeshire, England, a Special Purpose Vehicle (SPV) comprising of an installed and commissioned synchronous gas-powered standby generation facility. The acquisition consideration is £2.5m in cash – an initial £1.5m to be paid in cash at completion and deferred consideration of £1m to be paid in two equal tranches 8 months and 12 months respectively from the date of completion.|
|Powerhouse Generation Ltd||Cool Planet Group||Cool Planet Group, Enniskerry, Republic of Ireland, a company that provides digital energy and process optimisation solutions for manufacturing and process industries, acquired Powerhouse Generation Ltd, Belfast, Northern Ireland, which provides electricity management services, ultimately providing companies with energy-saving demand side units. Terms not disclosed.|
|IMES International Ltd||Pryme Group Holdings Ltd||Pryme Group Holdings Ltd, Dundee, Scotland, a provider of sub-contract precision manufacturing for the oil and gas industry, acquired IMES International Ltd, Aberdeen, Scotland, manufacturer of lifting and handling equipment, and Caley Ocean Systems Ltd, Glasgow, Scotland, fellow manufacturer of lifting and handling equipment. Terms not disclosed.|
|Bergen Engines||Langley Holdings Plc||Langley Holdings Plc, Nottinghamshire, England, a provider of engineering and construction services, agreed to acquire the Bergen Engines medium speed liquid fuel and gas engines business, from Rolls-Royce Holdings Plc, London, England, which manufactures and supplies gas turbine engines and power generation systems for the civil and defence aerospace, marine and energy sectors. Enterprise value of €63m.|
|Element Energy Ltd||ERM-Europe Ltd||ERM-Europe Ltd, London, England provider of environmental, health, safety, risk, social consulting, and sustainability related services, acquired Element Energy Ltd, Cambridge, which specialises in the intelligent analysis of low carbon energy. Terms undisclosed. .|
|Vinh Phuc Electrical Mechanical Installation Co Ltd Joint Venture||Coro Energy Plc||Coro Energy Plc, London, England, which holds low carbon investments in South East Asia, has signed binding Heads of Terms to acquire rights over a portfolio of 150MW rooftop solar projects in Vietnam via a joint venture with developer Vinh Phuc Electrical Mechanical Installation Co Ltd.|
|Renewables Consulting Group Ltd||ERM-Europe Ltd||ERM-Europe Ltd, London, England, a provider of environmental, health, safety, risk, social consulting, and sustainability related services, acquired The Renewables Consulting Group Ltd, Romsey, Hampshire, England, a provider of market intelligence, management consulting, and technical advisory services operating exclusively in the renewable energy sector. Terms not disclosed.|
|400MW Skerd Rocks Offshore Wind Farm||Green Investment Group Ltd||Green Investment Group Ltd, Edinburgh, Scotland, investor in green infrastructure, including offshore wind farms, waste and bioenergy, energy efficiency and onshore renewables, a subsidiary of Macquarie Group Ltd, Sydney, Australia, provider of diversified international banking, financial, advisory and investment services, has acquired the 400MW Skerd Rocks Offshore Wind Farm, Galway, Republic of Ireland, from Fuinneamh Sceirde Teoranta,Galway, developer of wind farms.|
|Octopus Energy Ltd||Al Gore’s Generation Investment Management||Octopus Energy Group, London, England, which supplies gas and electricity to domestic and commercial customers, agreed a $600m investment from Al Gore’s Generation Investment Management. With this investment Octopus will enhance their smart grid capability around the world.|
|Sunamp Ltd||Scottish National Investment Bank (SNIB)||Sunamp Ltd, East Lothian, Scotland, a designer and manufacturer of space-saving thermal storage that makes homes, buildings and vehicles more energy efficient and sustainable, secured a £6m convertible loan note investment from the Scottish National Investment Bank. Sunamp will use these funds to increase its sales in the UK, scale up production, and to accelerate international expansion into China, the Americas and continental Europe.|
|Isol8 Limited||BGF||Isol8 Limited, Aberdeen Scotland, a north-eastern oil and gas services firm received funding of £3.5m from BGF to support its long-term growth plans. As part of the transaction, BGF investor Richard Pugh will join the board of isol8 as an investor director, alongside newly appointed independent director Nigel Avern.|
|Nova Innovation||Scottish National Investment Bank (SNIB)||Nova Innovation Ltd, Edinburgh, Scotland, a company that develops and manufactures direct-drive tidal turbines for renewable tidal energy projects, received funding of £6.4m from the Scottish National Investment Bank. The proceeds will be used to the manufacturing and distribution of the company’s innovative subsea tidal turbines.|
|Bio-Bean Ltd||Various Investors||Bio-bean Ltd, Cambridgeshire, England, a company that manufactures a range of biofuels and biochemicals from recycled spent coffee grounds, secured £1.25m in equity financing. The round was led by Turquoise, a UK merchant bank through its Low Carbon Innovation Fund 2 (LCIF2), with the participation of 2Enable Partners, Stellar Impact and the Gresham House Renewable Energy venture capital trusts (VCTs).|
|Reactive Technologies Ltd||BGF||Reactive Technologies Ltd, Oxford, England, a developer of software and information infrastructure solutions to provide reactive power management, network efficiency, and demand-side response services, secured $15m in equity financing. The round was led by BGF, alongside Breakthrough Energy Ventures, and Eaton Corp.|
|Forev Limited||SNIB||Forev Limited, Edinburgh, Scotland, specialising in the operation and maintenance of sustainable electric vehicle infrastructure, raised £2m equity fund raising round led by Scottish National Investment Bank.|