Deal in Focus: Arle and Eyrir complete three-step divestment of Stork

Arle Capital Partners and Eyrir Invest, the owners of Dutch oil & gas support service Stork since a take-private in 2008, have concluded their three-step divestment of the asset via a final trade sale to Fluor Corporation for €695m.

The transaction, which sees Arle and Eyrir sell the final chunk of Stork to trade buyer Fluor, is scheduled to complete in the first half of this year but will first require consultation with Stork's works council, trade unions, and EU and Russian anti-trust regulators.

Texas-headquartered, NYSE-listed engineering multinational Fluor will wholly acquire the company as part of the deal. The new parent intends to fully fund the purchase, at around 7x Stork's €100m EBITDA, with debt raised from the international markets.

As Fluor's newest subsidiary, Stork will be integrated within the parent's operations and maintenance unit. The combination will result in a group with €2.1bn in revenues and 19,000 employees. The group will keep the Stork name and the company's Netherlands headquarters; CEO Arnold Steenbakker and CFO Pim Oomens will retain their roles after the trade sale.

Second time lucky
Founded in 1827, Stork provides maintenance and renovation services for clients within the oil and gas, chemicals, industrials and power segments. With headquarters in Utrecht, the business operates out of offices in Belgium, Germany, Norway, the UK, Russia, the US, Venezuela, Saudi Arabia and Australia, among others. The company employs 16,500 staff and most recently generated €1.6bn in revenues and €100m of EBITDA.

According to unquote" data, the asset first fell into private equity hands in 2008, when London-headquartered GP Arle, at the time known as Candover, teamed up with Icelandic peer Eyrir Invest to de-list the company from the Amsterdam stock exchange.

At €48.5 per share, Stork was taken private by the duo for a total of €1.5bn; Arle became the majority owner via its fifth fund, while Eyrir secured a minority interest. The selling shareholders comprised LME Holdings, controlled by Eyrir and Landsbanki; and Marel, a listed food processor in which Eyrir is a shareholder.

LME, which controlled a 43% stake in Stork, had blocked Arle's initial takeover attempt in September 2007 but changed its stance when the GP put forward a second bid. As part of the agreement, Stork's food systems unit was left out of the de-listing and sold instead to Marel for €415m.

Three-step plan
Two years after buying Stork, Arle and Eyrir began preparations for a gradual, three-step sell-off. As part of that scheme, testing laboratory unit Stork Materials Technology, deemed a non-core asset, was divested to 3i for €150m in November 2010. Six months later, both sides would meet at opposite ends of the negotiation table when Stork picked up energy industry support service RBG from 3i for an estimated £200m.

In August 2012, Arle and Eyrir split the remaining assets into two independent companies: oil and gas maintenance operations were regrouped under Stork Technical Services (STS), while the aircraft manufacturing business fell within the Fokker Technologies brand. The separation was made possible by a refinancing, which yielded STS and Fokker €372.5m and €200m in fresh debt, respectively.

In July 2015, the GP duo inked the second sell-off when Fokker was exited to engineering multinational GKN for €706m. The trade sale, financed via a £200m share placement and GKN's previous debt arrangements, saw Arle reap €500m in proceeds.

Put together, all three Stork partial sales represent a €1.5bn price tag; the figure mirrors what Arle and Eyrir paid to de-list the business in 2008.

People
Arle Capital Partners – John Arney.
Eyrir Invest – Örn Valdimarsson.
Stork – Arnold Steenbakker, Pim Oomens.

Advisers
Acquirer – Goldman Sachs (Corporate finance).
Vendor – Greenhill (Corporate finance); Rabobank (Corporate finance).
Company – De Brauw Blackstone Westbroek (Legal).

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