Epcon sold to M-I Swaco

23 Feb 2006

3i, Europe's leading private equity company, today announces the sale of its stake in Epcon Offshore AS, the leading provider of produced water treatment systems for the oil & gas industry, to M-I Swaco. 

3i invested in Epcon in November 2004 and has seen the value of the Company rise by more than 3.5 times over this period. 3i's investment rationale was to fund international expansion, further develop the technology, and build the organisation.  During the investment, Epcon has strengthened its management team with the appointment of Arne Aune as CEO and Mike Fleming as non-executive director, retained its dominance on the Norwegian Continental Shelf, firmly established itself on the UK Continental Shelf and has successfully expanded overseas.  2005 saw the company win approx. £19m worth of contracts and enter new geographies such as Canada and the Middle East.  New client wins include Exxon, Chevron, Maersk and Marathon.

Hans Middelthon, Investment Executive 3i Oil, Gas & Power, commented: "We invested in Epcon to support the company in fulfilling its ambitions of maintaining its leading position on the NCS, gaining a foothold in other markets, as well as developing the technology further.  That work is now completed and it is time for management and a new owner to lead the company through the next phase."

Arne Aune, CEO Epcon, commented: "3i has been a fantastic partner and has used its network to introduce both management and business opportunities to us.  We are now entering the next phase of our growth and are looking forward to the many exciting market opportunities that we will encounter under M-I Swaco's ownership."

MI Swaco represents a wide array of businesses involved in drilling, reservoir drill-in and completion fluids, Drilling Waste Management and associated services for the petroleum industry.  The acquisition of Epcon enables M-I Swaco to enter the water treatment market which it feels is complementary to its established businesses and uses its international strengths to globalise the market for the Epcon Compact Flotation Unit (Epcon CFU). 

3i was advised on the deal by Selmer DA and Maclay Murray & Spens (legal advisors), and CIBC World Markets (exclusive financial advisors). 

Notes to editors

3i is a world leader in private equity and venture capital. We focus on Buyouts, Growth Capital and Venture Capital and invest across Europe, in the United States and in Asia Pacific.  Our competitive advantage comes from our international network and the strength and breadth of our relationships in business. These underpin the value that we deliver to our portfolio and to our shareholders.

3i has funded 24% of all European oil & gas private equity deals in the last three years and manages an investment portfolio of more than 35 companies in the exploration and production (E&P) and service sectors.

The current oil & gas portfolio includes Vetco International (ABB's former upstream oil and gas business); EDP, an oilfield development project manager; Noreco, an E&P company focussed on the Norwegian Continental Shelf; Salamander Energy, an E&P company focused on South East Asia and Finnish oil spill response company Lamor Corporation. 

Previous investments include Petrofac, the international oil and gas facilities service provider, which floated in October 2005; Revus Energy, the independent Norwegian upstream company, which floated in June 2005; John Wood Group plc, the UK's largest oil service company, which was floated in 2002; Venture Production plc, one of the UK continental shelf's newest operators, also floated in 2002; and Sensa, an oilfield technology company sold to Schlumberger.