Riverstone is Planning US$900 million Sale of Abaco Energy

Riverstone Holdings LLC is preparing to sell oilfield services equipment company Abaco Energy Technologies, which could fetch about US$900 million.

The private equity firm is working with an adviser to run an auction for the Houston-based company.

Abaco is drawing interest from other private equity firms, it was  said.

Abaco makes, designs and services parts used for powering so-called mud motors, the section of an oil and gas well drilling system which rotates the drill bit far underground.

Riverstone committed to invest US$200 million in the company when it was founded in 2013 with the goal of acquiring energy manufacturing and services businesses, according to a press release at the time.

Abaco agreed to acquire drilling-equipment maker Basin Tools Inc. a year later, according to a statement.

Abaco Chief Executive Officer Ken Babcock previously worked for Titan Specialties Ltd and International Logging Inc, two other companies which Riverstone previously owned.

Abaco should benefit from increased demand over the next 18 months from oil and gas explorers, according to a research note this week from Moody’s Investors Service Inc, which upgraded its credit rating.

While the company has a small revenue base, it is “competitively positioned within its niche market,” Moody’s said.

Riverstone, which has offices in New York, London, Houston and Mexico City, has raised US$38 billion for energy investments since it was founded in 2000 by David Leuschen and Pierre Lapeyre, according to its website.

The firm raised US$4.2 billion for its most recent buyout fund, which closed in 2015, according to data compiled by Bloomberg.

Source: Rigzone