DUTCH offshore construction and services giant Hertel has stepped up its aggressive expansion into Western Australia to cash in on the state’s booming gas sector, buying the Australian operations of Norwegian offshore specialist Aibel Group.
DUTCH offshore construction and services giant Hertel has stepped up its aggressive expansion into Western Australia to cash in on the state’s booming gas sector, buying the Australian operations of Norwegian offshore specialist Aibel Group.
The move comes after Hertel took a controlling stake in Malaga-based Modern Industries in June for an estimated $10 million.
Hertel, which turned over more than $1 billion in calendar 2009 and has completed 200 acquisitions during the past two years, acquired Modern as its vehicle for expanding in the Australian market.
The rebranded Hertel Modern has 300 workers in the state and is a leading specialist insulation service provider to the LNG and petrochemical industries. It also provides large-scale heating, ventilation and air-conditioning (HVAC) solutions and specialist rail signalling solutions.
It has already provided cryogenic insulation and maintenance services to some of the biggest energy projects in the north-west, including Burrup Fertilisers’ Karratha ammonia plant and the North West Shelf LNG plant.
Hertel Modern was also recently awarded WA’s biggest HVAC contract for the Fiona Stanley Hospital in Murdoch.
The deal to buy Aibel’s Australian business, for an undisclosed sum, marks the group’s first major foray into Australia’s lucrative offshore operational and maintenance services sector and gives it a substantial immediate presence.
Aibel is a major provider of specialist platform operations and maintenance services with contracts at a number of major offshore facilities, including Vermilion Energy’s Wandoo platform off the Pilbara coast.
It has also been a construction contractor on various gas projects, including the Otway gas project in Victoria originally developed by Woodside Petroleum.
Since its acquisition, the business has been renamed Hertel Modern Offshore.
Hertel Modern managing director Andrew White was out of the country and could not be reached for comment this week, but last month told WA Business News that Hertel was particularly interested in targeting WA’s LNG sector.
Partnering with Hertel would also give Modern, which remains 49 per cent owned by its local management, the balance sheet strength and capability to target major LNG projects such as the Pluto, Wheatstone, Gorgon, and Browse projects.
Aibel’s sale of its Australian business comes as its privately held Norwegian parent considers a possible public offer and European listing as a ‘strategic alternative’ to strengthen the group’s growth platform.
The pullback from Australia is believed to be part of a renewed focus on its European and Asian operations.
Aibel, which has been owned by Norwegian private equity group Herkules Capital since 2007, expects to turn over almost $1.2 billion in calendar 2010.
