Norway's Aker Solutions ASA agreed Monday, May 21, to buy NPS Energy from Kuwaiti-owned National Petroleum Services for an enterprise value of about $460 million to expand its oil and gas field services operations in the Middle East and North Africa.
The deal values NPS Energy's equity at $350 million and includes about $110 million of assumed debt. It values the target at 7.3 times the Ebitda of $48 million that is forecast for 2012.
The purchase is the latest in a series of transactions that have transformed Aker from a predominantly construction business into a specialist provider of technology, equipment and services to oil and gas companies. In December 2010, the Oslo-based group sold process and construction operations to Pasadena, Calif.-based Jacobs Engineering Group Inc. for $675 million. Six months later, in mid-2011, it spun off oilfield engineering and construction business Kvaerner ASA, listing the operation on the Oslo exchange.
The acquisition of NPS Energy "is our next major step in the transformation of Aker Solutions into a leading and global oilfield products, systems and services company," Aker executive chairman Øyvind Eriksen said in a statement. "To succeed in the [Middle East], we need a strong distribution platform and well-established customer relationships managed by a management team with a proven track record. Basically, this is what we achieve by acquiring NPS Energy."
Eriksen said that Aker had won 600 million Norwegian kroner ($100 million) of business in the Middle East and North Africa in the first quarter of 2012 but admitted that his company's "success rate in recent tendering has been fairly low."
Dubai-based NPS Energy is a provider of oil well intervention and drilling services. It has about 900 employees and generated sales of about $116 million in 2011. It is headed by Adnan Ghabris, who will take on the role of Aker Solution's regional president for the Middle East and North Africa, following finalization of Aker's acquisition, toward the end of this year.
Aker said it would fund the deal using existing cash. Shares in Aker, which are listed on the Oslo exchange, traded Monday at Nkr161, up less than 1% on their previous close.
Aker tapped Slaughter and May's Tim Boxell and Norwegian law firm BA-HR's Svein Gerhard Simonnæs and Jon Christian Thaulow for legal advice on the deal.