EY advises the shareholders of Novomet Group on a major Russian private equity transaction
MOSCOW, 13 December 2011 – Ernst & Young provided lead financial advisory to Novomet Group, a major Russian manufacturer of equipment for the oil & gas industry, in raising capital from a syndicate of three investors, namely, RUSNANO, private equity firms Baring Vostok and Russia Partners.
This is a landmark transaction for the oilfield services market and the private equity deal of the year in Russia. Ernst & Young has advised Novomet shareholders on all aspects of the transaction with private equity firms - from investor search, marketing and rounds of negotiations to deal structuring and successful closing, as well as assisted client in negotiating transaction with RUSNANO, thus proving Ernst & Young leading financial advisor position. The team was led by Ekaterina Sedova, M&A Associate Director.
Novomet, established 20 years ago by a group of Russian engineers, is one of the world's most innovative producers of equipment for artificial oil lifting and a leading Russian oilfield service provider. The investment project will have three focuses: innovation, reconstruction and modernisation of facilities and service, involving the establishment of service centres. The transaction is expected to strengthen Novomet’s presence on foreign oilfield services markets. Service centres have already been opened in 10 countries including in the CIS, Middle East, South America, North Africa and the Pacific region. The company plans to open centres in a further ten countries.
Davron Rustamkulov commented: “Ernst & Young proved its leading financial advisor position, working on a complex transaction with multiple parties involved. Novomet Group is one of the most innovative and dynamic companies in the industry. RUSNANO, Baring Vostok and Russia Partners are most visible players on the private equity front. The key success factors in this transaction were apparent strategic fit of innovation and growth capital, appreciation of the growth opportunity, strong commitment of the parties to do a deal”.
RUSNANO was established in March 2011 as an open joint-stock company through reorganization of state corporation Russian Corporation of Nanotechnologies. RUSNANO's mission is to develop the Russian nanotechnology industry through co-investment in nanotechnology projects with substantial economic potential or social benefit. The Government of the Russian Federation owns 100 percent of the shares in RUSNANO.
Baring Vostok specializes in investments in Russia and other CIS countries. Baring Vostok’s long-term investors are US, West European and Asian pension and university funds. Since 1994, Baring Vostok funds have invested more than USD 1.6 billion in 56 projects, including a number of successful companies in financial services and the oil and gas industry, telecommunications and media, and the consumer sector. The funds currently have USD 2.2 billion in attracted capital. Baring Vostok has been recognised by readers of Private Equity Online and Private Equity International as “Russian Private Equity Firm of the Year” each year from 2005 through 2010.
Russia Partners is a pioneer in private equity in Russia and the CIS and has more than USD 1 billion in investments under management. Since its establishment in 1991, the fund has managed more than 60 investments in Russia and the CIS. Russia Partners is the Russian affiliate of Siguler Guff & Company, a global private equity fund with more than USD 10 billion in assets and its headquarters in New York.
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