BoE stress tests: all you need to know

The Bank of England has released the results of its latest round of its annual banking stress tests and its semi-annual financial stability report this morning. Used to measure the resilience of a bank’s balance sheet in adverse scenarios, the stress tests measured the impact of a severe slowdown in Chinese growth, a global recession […]

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Draghi: Eurozone will decline without vital productivity growth

It’s productivity, stupid. European Central Bank president Mario Draghi has become the latest major policymaker to warn of the long-term economic damage posed by chronically low productivity growth, as he urged eurozone governments to take action to lift growth and stoke innovation. Speaking in Madrid on Wednesday, Mr Draghi noted that productivity rises in the […]

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Asia markets tentative ahead of Opec meeting

Wednesday 2.30am GMT Overview Markets across Asia were treading cautiously on Wednesday, following mild overnight gains for Wall Street, a weakening of the US dollar and as investors turned their attention to a meeting between Opec members later today. What to watch Oil prices are in focus ahead of Wednesday’s Opec meeting in Vienna. The […]

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Banks, Financial

RBS emerges as biggest failure in tough UK bank stress tests

Royal Bank of Scotland has emerged as the biggest failure in the UK’s annual stress tests, forcing the state-controlled lender to present regulators with a new plan to bolster its capital position by at least £2bn. Barclays and Standard Chartered also failed to meet some of their minimum hurdles in the toughest stress scenario ever […]

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Barclays: life in the old dog yet

Barclays, a former basket case of British banking, is beginning to look inspiringly mediocre. The bank has failed Bank of England stress tests less resoundingly than Royal Bank of Scotland. Investors believe its assets are worth only 10 per cent less than their book value, judging from the share price. Although Barclays’s legal team have […]

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Categorized | Financial

KKR branches out with Acteon

Posted on September 30, 2012

First Reserve, the energy-focused private equity group, said it had sold its stake in oil services company Acteon Group to US buyout group KKR, in a deal that values Acteon’s equity and debt at £800m-£900m.

The move marks KKR’s first investment in the fast-growing oilfield services sector.

    “As exploration and production shifts into more complex environments, like deepwater offshore, the oil and gas industry will increasingly need more third-party expertise and specialised services,” said Josselin de Roquemaurel, who leads KKR’s energy group in Europe.

    Acteon Group, based in Norwich, occupies a lucrative niche in the offshore oil industry, providing subsea engineering products and services. It specialises in equipment that connects drilling rigs to oil wells, such as risers and flow lines, and also installs foundations for offshore oil production platforms, often in extremely deep water. It has recently moved into installing offshore wind turbines.

    The company is active in the North Sea, west Africa, Brazil and the Asia-Pacific region.

    First Reserve bought a 52 per cent stake in Acteon in 2006 for £70m. A person with knowledge of the deal with KKR said the enterprise value of the whole company was less than £200m in 2006 and is now £800m-£900m. First Reserve and KKR declined to comment on the value of the deal.

    Will Honeybourne, a managing director at First Reserve, said that since it made its initial investment, Acteon had “quadrupled its operating profit, expanded its geographical footprint and service offering and grown the number of its employees from 650 to over 1,900”. “It’s a continuing growth story,” he said.

    Acteon’s expertise in deepwater has translated into strong demand for its services at a time when the oil industry is venturing further and further offshore and drilling ever deeper into the seabed, particularly in places like Brazil’s “pre-salt” fields. “Over the past five years, a third of the oil discovered in the world was in offshore Brazil,” Mr Honeybourne said.

    The sale of the Acteon stake continues a recent European trend of private equity firms selling companies to each other in so-called secondary deals. In July, Hellman & Friedman bought a majority stake in Wood Mackenzie from Charterhouse Capital Partners in a deal that valued the energy consultancy at £1.1bn.

    Energy has in recent months become a big focus of acquisitions by private equity firms. In February, Apollo Global Management, a US-listed group, paid $7.15bn for parts of El Paso, an energy producer, just months after KKR led a $7.2bn buyout of Samson, a US oil and gas explorer.