ABERDEEN-based OEG Offshore, which supplies cargo units to oil and gas firms, has continued its expansion drive by acquiring a Singapore firm in spite of the prospect of a prolonged oil price slump.
The acquisition of AOR Containers from Germany's Buss Global Holdings will allow OEG to enter markets such as Norway and Myanmar and signals confidence in the long term prospects for the industry in such areas.
The price of the deal was not disclosed.
Coming months after OEG bought a US business, it provides further evidence that some oil services firms see the potential to do deals at prices they find attractive.
OEG’s chief executive John Heiton said consolidation was necessary in the industry to rebalance supply and demand given the market backdrop.
Oil services businesses can use takeovers to add scale potentially giving them more bargaining power with the companies they work for and to spread their geographic bets.
Sector watchers have noted that assets prices have fallen amid the downturn creating opportunities that firms with strong balance sheets can capitalise on.
US private equity giant Kohl Kravis and Roberts acquired a majority stake in OEG in July 2014, the month after the crude price peaked at $115 per barrel.
The company highlighted the potential to grow OEG’s presence in overseas markets.
A range of firms have been trying to reduce their reliance on the UK North Sea since before the crude price plunge. This has posed big challenges in what oil and gas firms see as a high cost area.
The acquisition is the second that OEG has made under the US firm's ownership.
In August last year OEG increased its presence in the key Gulf of Mexico market following a multi-million dollar deal with America's Cameron Rental and Tank.
The company acquired Caspian region specialist OSCA Environmental Services in June 2014, weeks before KKR took control.
AOR Containers has turnover of around $4 million compared with $100m for its new owner.
However, OEG said the Singapore firm had invested more than $60m in its 6,000 strong fleet of cargo units over the last two years.
The takeover will allow OEG to grow its fleet by around a third to 25,000 consolidating its standing as one of the largest providers of offshore cargo carrying units in the world.
AOR’s 20 staff will join OEG, which employs 140, including 52 in Aberdeen.
Mr Heiton, said: “AOR Containers has grown significantly over the past two years, with a sizeable footprint in Norway, Africa, the far east and also the Americas."
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