InsightsEnergy Growth Fuels TransactionsNorth America’s energy revolution is starting to have a By Harry Wardprofound impact on the maritime and offshore sectors.orth America is undergoing a gradual revolution Coates Offshore by Houston’s SCF Partners. Coates provides in energy production, and the transformation has specialty rental equipment for well and pipeline test and main-begun to have a profound impact on the maritime tenance to offshore operators in the North Sea, and was di-Nand offshore sectors. Despite a few volatile years vested by Coates Group Holdings Pty of Australia.and mixed performance of public companies in the offshore Clearly there has been a great deal of appetite among service and drilling markets, the outlook for energy services American companies and investors for niche offshore services seems to be positive according to most analysts. Recovery in companies in the UK. Closer to home, business activity in the the Gulf of Mexico (GoM) continues to accelerate since the GoM continues to grow overall, despite some short-term ? uc-Deepwater Horizon spill and deep water rig utilization rates tuations. Offshore service company Harvey Gulf International are at their highest level in ? ve years. According to IHS, the Marine has been making headlines for several quarters now number of deep water rigs under contract in the GoM is up as it executes on an aggressive growth plan. Backed by the from 75 to 80 in the past twelve months. Optimism stemming large private equity ? rm The Jordan Company, Harvey Gulf from such statistics has been re? ected in increased deal ac- has expanded via acquisitions and newbuild projects, and has tivity including company acquisitions, new vessel orders and established itself as a leader in the migration to LNG fuel sys-purchases of drilling rights in recent months. tems for its ? eet. In the fourth quarter of 2013, Harvey Gulf completed the acquisition of Abdon Callais Offshore, LLC for Offshore Service and Maintenance $460 million. Abdon Callais came with a young, technically-A wide range of companies that provide operations and advanced ? eet of 48 offshore supply vessels. The company maintenance services to the offshore industry have seen over- also acquired 20 other advanced vessels from Gulf Offshore all demand increase, and there has been a noticeable increase Logistics and Bee Mar in the past couple of years, and has in the number of middle market M&A deals in the space. Late a number of new vessels under construction. In a ? nal note, in 2013, Teledyne Technologies (NYSE:TDY) acquired CD Harvey Gulf recently broke ground on its $25 million indus-Limited (CDL), a supplier of subsea inertial navigation sys- try-leading LNG fueling facility Port Fourchon, LA.tems and motion sensors for marine and offshore applications, for $22.5 million. Teledyne continues to build on its strong Jones Act Dealsposition in subsea instrumentation and imaging products, with Beyond offshore service vessels, the energy revolution has the acquisitions of CDL and BlueView Technologies within energized business activity in other Jones Act segments. US-a year of one another. Similarly, US-based Roper Industries ? agged carriers for coastwise and inland transport of energy (NYSE:ROP) acquired a UK offshore technologies company products have been in high demand, and some high-pro? le with its $55M purchase of Advanced Sensors Limited. Ad- ? nancial transactions have re? ected this trend. In December, vanced Sensors holds a strong position in the growing seg- pipeline and terminal giant Kinder Morgan Energy Partners, ment of oil-in-water analyzers, and is likely just one of several LP (NYSE:KMP) agreed to acquire American Petroleum acquisitions to come for growth-oriented Roper. Tankers (APT) and State Class Tankers (SCT) from an invest-Offshore oil production creates a tremendous amount of ment group including The Blackstone Group and Cerberus waste, and there is a thriving industry built around consulting Capital Management. The $962 million cash deal gets Kinder and cleaning services for the oil patch. In early February, private Morgan into the petroleum marine transport business with equity ? rm Lariat Partners announced the $100M acquisition nine product tankers of about 330,000 barrels of capacity, in-of Newpark Environmental Services from Newpark Resources cluding four scheduled SCT newbuilds under way at the Gen-(NYSE:NR). Lariat will combine two acquired Newpark divi- eral Dynamics NASSCO shipyard.sions with its platform company Offshore Cleaning Systems, Another interesting story in the Jones Act carrier world has to create a new industry leader called Ecoserv. Another small, been the transformation of Aker Philadelphia Shipyard (Oslo: private equity-backed deal was the acquisition of $34 million AKPS) from a struggling, government-supported facility to 10 Maritime Professional 1Q 2014I I MP Q1 2014 1-17.indd 10 MP Q1 2014 1-17.indd 10 2/26/2014 1:17:23 PM2/26/2014 1:17:23 PM