Norwegian oil services company Archer to exit North America
22 May 2013
Norwegian oil services company Archer today said that it will sell its North American Rental and Tubular division to an affiliate of private equity firm Clearlake Capital Group for $244 million in cash, in order to reduce debt.
The Oslo-listed company's Rental and Tubular division provide equipment and services to exploration and production operators across key US land markets and the US Gulf Of Mexico, in addition to both land and offshore markets in Mexico.
The division's two primary offerings are rental equipment, which provides primarily drilling and completion equipment such as drill pipe, heavy weight drill pipe, drill collars, tubular handling tools, pressure control equipment and tubing, and tubular services, which includes casing and tubing running and tubular handling services.
For both offerings, the company is one of the largest providers in the North American market.
In 2012, Archer's North American Rental and Tubular Division generated $100 million in revenue and contributed $45 million in earnings before income taxes, depreciation and amortization.
At the end of December 2012, the business had net assets of $244 million and employed around 250 people.
"This divestiture will help Archer to focus its efforts in North America on its service and product offering directed towards unconventional resources, while operations in other parts of the world are not impacted by this transaction. It will also help to simplify and further deleverage the company" said Fredrik Halvorsen, CEO and vice chairman of Archer.
Josť Feliciano, a founding partner at Clearlake, said, "These businesses are well-positioned to increase their market share and capitalize on continued growth in the North American oil and gas market. They represent a strong platform and we are eager to support their outstanding management team and invest to expand the business."
Clearlake Capital focuses on special situations and private equity investments such as corporate divestitures, recapitalisations, buyouts, reorganisations, turnarounds and other equity investments.
It currently manages approximately $1.4 billion of equity capital, and has led over 50 investments totaling more than $3 billion of capital in sectors including business services, communication, consumer products/retail, defense and public safety, energy/power, healthcare, industrials, media, and technology.