Investment Completion - EPI Group Holdings Limited

News: Investment News | 8 December 2016

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A leading global oil & gas consultancy is poised to take advantage of new growth prospects having secured a £4.75million flexible debt package provided by private investor clients of Connection Capital, the specialist private client investment business.

  • Mezzanine loan should enable company to capitalise on cyclical recovery in oil & gas sector
  • Deal structure includes potential for equity upside

EPI Group will use the investment to provide capital for strategic M&A and to pursue organic growth opportunities as the market recovers, and to replace its existing senior debt. This will enable it to diversify its service offering, expand its reach and strengthen its market position.

An award-winning provider of a range of consultancy services to the energy sector, EPI has particular specialist expertise in onshore and offshore seismic surveys for oil & gas exploration companies.

It is now the second largest global provider of seismic QC services, with blue chip clients including BP, Shell, ExxonMobil, Repsol, Statoil and Total. Headquartered in the UK, it supports surveys all over the world and has recently added to its office network with new openings in Perth, Australia and Houston, USA.

Mezzanine loan should enable the company to capitalise on cyclical recovery in oil & gas sector

The company, which continued to trade positively during the recent challenging market conditions, is currently experiencing increasing demand for its newly diversified service offering and sees now as a good time to broaden its reach and its scope.

The company’s former banking arrangements were not set up in a way which allowed for growth by acquisition, but Connection Capital’s loan investment will provide vital flexibility to meet the business’ needs.

As part of EPI’s strategy to broaden its scope for supporting clients’ exploration and development programmes, the company recently announced the acquisition of P.D.F. limited. P.D.F. are a leading UK-based Oil & Gas geoscience consultancy, providing exploration and production/development advisory services, as well as acting as an outsourced exploration department for a range of international clients

Connection Capital says that the deal comes at an opportune point in the cycle, as activity in the oil & gas sector picks up again after the partial oil price recovery and stabilisation over the past six months. Many industry commentators anticipate a recovery in exploration activities in 2017/18.

The deal sees Connection Capital co-investing alongside leading UK mid-market private equity manager Palatine Private Equity, which funded EPI’s MBO in 2014.

Connection Capital is able to work alongside managers such as Palatine in flexible and mutually beneficial structures because of its unparalleled ability to build specialist syndicates from private investors. This means that Connection has no particular funding restrictions, limitations or requirements in determining these Structured Solutions, which might be present for more traditional Funds or financial service businesses operating within fixed parameters.

“EPI has a strong track record and multinational blue-chip client base, so opening the way for it to implement its ambitious growth plans at this critical point in the cycle should be a win-win for both the company and our clients.” Claire Madden, Managing Partner