On Monday 10 June, Herkules signed an agreement to acquire Umoe Schat-Harding AS. The acquisition is being carried out in cooperation with the owners of Noreq AS, who, in parallel, are selling Noreq to Herkules and reinvesting a substantial amount in a new, joint holding company. The transactions are expected to be finalised the first half of July.
The intention with the acquisition is to build on Schat-Harding’s and Noreq’s strong market positions in the new combined company. For 2013 the companies expect total revenues of approximately NOK 1.2 billion.
Continuing the best of both companies
‘Schat-Harding and Noreq complement each other in an excellent manner. By combining the expertise and ability to deliver of both companies, our customers will be able to rely on us even more in terms of equipment deliveries, good service and costs,‘ says Styrk Bekkenes, Managing Director of Noreq and the largest investor after Herkules.
The global market for life-saving equipment is very fragmented at present. There is a clear need for bigger and more robust players, a development that the combination of Schat-Harding and Noreq will contribute to. Schat-Harding has long been a leading international player, it has a unique position in the North Sea offshore market, and it has the world’s biggest service network for life-saving equipment. In the space of a few years, Noreq has developed into a significant player with a strong international presence. Both companies have been quick to introduce products and solutions that satisfy new, more stringent safety requirements in the offshore sector.
Herkules Private Equity Fund III will be the principal owner of the new company. Herkules is Norway’s leading private equity firm, and it has strong experience of owning and developing companies.
Positioned for new regulations on the Norwegian Continental Shelf
A process is currently ongoing to introduce new regulations for offshore lifeboats on the Norwegian Continental Shelf. They are expected to enter into force from 2015. ‘The new regulations for lifeboats on the Norwegian Continental Shelf will be an important growth driver for Schat-Harding as market leader. At the same time, Schat-Harding and Noreq combined will be able to lead the market internationally in relation to the offshore, cruise and merchant fleet segments. As the leading private equity fund in Norway, we are in an excellent position to create a global market leader with a basis in Norway,’ says Morten Blix, Senior Partner of Herkules.
The largest service network in the world
Schat-Harding has the world’s largest service network for life-saving equipment, which is also an important competitive advantage for the company’s equipment deliveries. As a result of the combination with Noreq, Schat-Harding will be the chosen service partner for Noreq’s 4,200 units installed worldwide.
‘We see considerable opportunities for growth through additional acquisitions and organic growth. Herkules’ access to capital and its expertise in developing companies will be an important contributor to realising the market potential in the years ahead,’ says Birger Gråthen, Managing Director of Umoe Schat-Harding Services.
Leading in terms of innovation
It is the two most innovative suppliers of life-saving equipment that will now be joining forces. Schat-Harding’s lifeboat type FF 1200 is the first in the world to have completed a full-scale test pursuant to the new requirements for free-fall lifeboats on the Norwegian Continental Shelf. The FF 1200 also holds the record for the world’s highest free fall – 65.1 metres.
‘With Herkules as our financially strong new principal owner, we will be able to continue with our product development and grow into new markets based on our leading position in the North Sea,’ says Geir Arne Veglo, Managing Director of Umoe Schat-Harding Equipment.
Noreq has enjoyed great international success in recent years with its new series of ‘enclosed’ lifeboat davits in which all the critical components of the davits are protected inside the davit structure – protected from demanding weather conditions and wear and tear. The new davits are innovative and result in substantial cost reductions in connection with installation and maintenance.
‘Innovation will continue to have high priority for the new company. At the same time, however, we will have strong focus on our solutions being the most favourable in terms of price – for both existing customers of Schat-Harding and Noreq, and, not least, for new customers,‘ says Styrk Bekkenes.
‘I have been the owner of Umoe Schat-Harding for 26 years, and while the company has experienced some demanding years, the employees and management have successfully turned the company, so that it is now positioned for profitable growth. The year 2012 was the best in the company’s history. Now is the right time to bring in new owners with competence and capital. I am convinced that the combination with Noreq will strengthen both companies and that Herkules will be an excellent owner that contributes to continued rapid growth and development from a Norwegian base,’ says Jens Ulltveit-Moe, President and CEO, and majority owner of the Umoe Group.
Senior Partner, Herkules Capital
Tel.: (+47) 22 04 80 04
Managing Director, Noreq AS
Tel.: (+47) 40 40 35 20
Chair of the Board Umoe Schat-Harding, Group CFO Umoe AS
Tel.: (+47) 92 82 61 66
Managing Director Umoe Schat-Harding Service
Tel.: (+47) 90 86 60 51
Geir Arne Veglo
Managing Director Umoe Schat-Harding Equipment
Tel.: (+47) 90 04 90 49
Schat-Harding in brief
Schat-Harding is a leading global supplier of maritime life-saving systems, with the worldwide service network of the industry. The company has more than 800 employees, operates in 13 different countries and has 25 offices and a service network comprising more than 60 stations. Schat-Harding has production facilities in Europe, Asia and the USA. The company’s head office is in Rosendal in Kvinnherad municipality, Norway.
Noreq in brief
Noreq is a global supplier of life-saving equipment and other deck equipment, and its product portfolio includes lifeboats, rescue boats, davits, cranes and fenders. Noreq is a relatively young company, formed in 2006, but it has consolidated its position in this market by establishing an extensive international presence and an innovative product portfolio. The company has 125 employees and is represented in eight countries. The company’s head office is in Husnes in Kvinnherad municipality, Norway.
Herkules in brief
Herkules is Norway’s leading private equity fund, with a total capital base of NOK 12.25 billion in committed capital from Norwegian and international investors. The fund invests in established companies with strong growth potential, either for organic growth or growth through acquisitions. Herkules focuses on companies based in the Nordic countries, primarily in Norway. Herkules acquires majority ownership positions in the companies and has strong experience of partnership with existing shareholders. Herkules has respect for the companies’ history, and takes an industrial approach, focusing on long-term growth.