The UAE-based energy services company plans to use the acquisitions and organic growth to help achieve its target to increase its turnover by over two thirds to £200 million (Dh1.18 billion) by 2015.
Senergy, a UAE-based energy services company, plans to hit the M&A trail after selling a controlling stake in the firm to the UK’s Lloyd’s Register, its chief executive James McCallum said yesterday.
With a capital boost from its new parent group, Senergy plans to use the acquisitions and organic growth to help achieve its target to increase its turnover by over two thirds to £200 million (Dh1.18 billion) by 2015.
Private equity firms have been busy in the Middle East acquiring oil service companies.
The Bahrain-based private equity firm Investcorp has bought stakes in Al Yusr Industrial Contracting, Saudi Arabia’s oil and gas services company, and Hydrasun, a Scottish supplier to the oil and gas sector. Senergy had held talks with a number of private equity firms before agreeing the deal with Lloyd’s Register.
The company, which has offices in Dubai and Abu Dhabi, hopes to make two to three acquisitions a year over the next three years in order to grow and help reach its targets.
“We look for companies that are a suitable platform ... that have a skill set we don’t have in a particular geographical market or have a skill set that deepens our existing capabilities,” Mr McCallum said.
“Initially we would hope to be successful in expanding our business into the Americas. Initially, we would use Houston as a springboard for building our capabilities.”
In the Americas, the firm already operates in Brazil, Columbia and Argentina.
After the Lloyd’s Register deal, Senergy now expects be able to target acquisitions in the £10m to £20m range compared to previously focusing on the £5m to £10m range.
“Clearly we have an extremely capable organisation functioning in Europe right now, we have an embryonic capability in Senergy developing in Asia and we want to strengthen it. We have an embryonic capability in the Americas and we want to strengthen that,” said Mr McCallum.
“So the focus of our acquisition is to build on where we have got an embryonic capability, so that we have a full service capability.”
It also expects Lloyd’s Register’s stake in the firm to rise to 100 per cent within three years.
“They [Lloyd’s Register] are a company with money and they want to grow in the energy space in which we have been growing and that’s as close to perfect fit as you get,” said Mr McCallum.
“The real overarching metric is that Lloyd’s Register group has a desire to achieve £1.5bn turnover by 2015/2016. Currently their turnover is £900m. We would hope to take our turnover from about £121m up to over £200m as part of that story.”
Senergy, which was first established in 2005, forecasts its turnover will reach £140m this year from continued growth in its services to the oil & gas sector which include operations in exploration and refining in about 105 countries spanning the Middle East, United Kingdom, Scandinavia, Australia, South East-Asia and the Americas.
The firm operates in various fields including reservoir engineering, geosciences, power engineering and alternative energy solutions.
“Our biggest revenue generation is currently in the drilling space, we also develop significant revenue from the subsurface analysis, geoscience space and development solutions,” he added.
“Infrastructure design work around bringing a field development on stream, that’s becoming an increasingly interesting space for us.”
In the Middle East, the firm works with companies including Abu Dhabi’s Taqa and Mubadala. It also works with clients in Qatar and Yemen.
Lloyd’s Register provides advice and expertise in the energy and transportation sectors.