Norway's Aker Solutions to sell well intervention business to EQT for $654 mn

Norwegian oil services firm Aker Solutions over the weekend agreed to sell its well intervention business to Swedish private equity firm EQT for NOK 4 billion ($654 million) including debt, in order to focus on its deepwater operations.

The deal includes an earn-out provision where Aker Solutions will receive 25 per cent of any internal rate of return exceeding 12 per cent a year on EQT's equity investment.

The transaction's equity value purchase price is NOK 3.4 billion, based on an enterprise value of NOK 4 billion as of 30 June 2013. Including repayment of inter-company debt, Aker Solutions will receive little over NOK 4 billion.

Aker Solutions said that it will book a gain before any earn-out of between NOK 1.8 billion and NOK 1.9 billion from the transaction and may also book an additional income based on the unit's performance.

"The sale is part of a strategy to increase our focus on the deepwater and subsea oil-services markets, where Aker Solutions is well-positioned," said Oyvind Eriksen, executive chairman of Aker Solutions. "The well-intervention services business has limited synergies with the rest of the company and will be better able to develop its full potential with EQT as the owner."

Aker Solutions well intervention business provides services that optimise flows from oil reservoirs. It is strongly positioned within wireline tractor services, which are used to transport well-intervention equipment along horizontal wells, as well as coiled tubing.

Its main markets are in the UK and Norway.

The division has about 1,500 employees in Europe, Asia, the US and the Middle East And its main markets are in the UK and Norway.

In 2012, it had revenue of NOK 2.2 billion and earnings before interest, tax depreciation and amortisation of NOK 401 million.

Aker said that it will remain involved in the development of the well-intervention services business through board representation. Rolf Leknes, who heads the division, will on completion of the transaction remain with the business for a limited period.