KKR has agreed to acquire a minority stake in RigNet from Cubera. KKR, once its closes its buy of 4.75 million shares, will become RigNet’s largest shareholder, holding a 27% stake in the company. Houston-based Rignet provides managed remote communications solutions, systems integration and collaborative applications to the global upstream energy sector.
CORRECTION: The headline incorrectly stated that KKR would be buying a majority of RigNet. In fact, KKR is buying a minority .The headline has been changed.
HOUSTON, LONDON & OSLO–(BUSINESS WIRE)–Kohlberg Kravis Roberts & Co. L.P., a leading global investment firm, today announced the signing of a definitive agreement under which funds advised or controlled by KKR are acquiring a significant minority stake in RigNet, Inc. (NASDAQ: RNET) from Cubera, an investment firm specializing in the Nordic private equity market.
Upon closing of the acquisition of 4.75 million shares, which is subject to customary approvals, KKR will become RigNet’s largest shareholder, holding a 27% stake in the company.
RigNet is a leading provider of managed remote communications solutions, systems integration and collaborative applications to the global upstream energy sector. Operating across the life of the field, RigNet serves offshore and onshore drilling rigs, production facilities and energy maritime with solutions ranging from fully-managed voice and data networks to more advanced applications that include video conferencing and real-time data services. It provides services to over 1,100 remote sites in over thirty countries across six continents.
Johannes Huth, Member of KKR and Head of Europe, stated: “We are investing in a fast-growing global market leader that has created an attractive niche at the intersection of three of our core investment themes: energy, technology, and services. All three sectors exhibit structural growth well ahead of broader GDP trends. We are excited about this addition to our investment portfolio and we look forward to supporting RigNet’s growth strategy as a patient and constructive shareholder.”
Mattia Caprioli, Member of KKR and Head of KKR’s services sector team in Europe, added, “We believe that the digitalization of upstream energy has only just begun. A prime example is the rapidly growing demand for broadband connectivity for oil and gas operations in remote and harsh environments. Today, the connection speed of deepwater drilling rigs is a fraction of the internet connection speed of a typical family home. Scarce bandwidth needs to be shared between regulatory supervision, remote management, firm-wide ERP systems and business communication. Crew well-being is increasingly tied to connectivity as employees stay in touch with their families, use telemedicine services and use web and intranet as a source of infotainment and training. As significantly more bandwidth capacity becomes available and more real-time information is shared between rigs and headquarters, drillers, operators and oil field services providers will be able to improve health and safety, drive operational efficiencies and boost crew morale. We expect RigNet’s mission-critical connectivity, integrated systems and innovative services to play a vital role in helping customers shape the digital oil field of the future. We share management’s goal to establish RigNet as a pre-eminent global services provider to the oil and gas industry.”
“We see KKR as a very good partner for RigNet going forward,” said Jorgen Kjaernes, Managing Partner of Cubera. “Cubera acquired the lead investor position as part of a secondary acquisition in July 2008 and the investment has proved to be successful for our investors. Since 2008, the company has more than doubled its revenues and further strengthened its strategic position.”
Orjan Svanevik, Managing Director at OAVIK, advisor to Cubera, added that the company has created exceptional value since the Nasdaq IPO in 2010. “With excellent management and KKR as lead shareholder, we believe the foundation is in place for continued growth in the years ahead.”
KKR has deep industry expertise having invested over $10 billion with investments across the spectrum of telecommunications, technology and services sectors. Its investments span a broad range of segments, including fixed line and cable, mobile telephony, towers and satellite infrastructure, telecoms equipment, software, internet, digital media, information services and outsourced support services to corporate and public sector customers.
Since 2009, KKR has invested or committed approximately $4.0 billion to investments in oil and gas spanning buy-outs, minority equity investments, joint-ventures, and asset-level and structured investments.
In this transaction, KKR was advised by ABG Sundal Collier, McKinsey & Company, Simpson Thacher & Bartlett LLP, Deloitte LLP and Schjodt. Cubera was advised by OAVIK Capital and Willkie, Farr & Gallagher LLP.
Founded in 1976 and led by Henry Kravis and George Roberts, KKR is a leading global investment firm with $83.5 billion in assets under management as of June 30, 2013. With offices around the world, KKR manages assets through a variety of investment funds and accounts covering multiple asset classes. KKR seeks to create value by bringing operational expertise to its portfolio companies and through active oversight and monitoring of its investments. KKR complements its investment expertise and strengthens interactions with fund investors through its client relationships and capital markets platform. KKR & Co L.P. is publicly traded on the New York Stock Exchange (NYSE: KKR), and “KKR,” as used in this release, includes its subsidiaries, their managed investment funds and accounts, and/or their affiliated investment vehicles, as appropriate.
Cubera is an investment firm specializing in the Nordic private equity market and is the leading player in the Nordic secondary market. By being local, Cubera utilizes its unique advantage in sourcing, evaluating and completing secondary transactions in Nordic buyout funds. The partners have been active in the private equity market since the late 1980´s and the experience includes a broad variety of private equity investing, ranging from unique fund investments and secondary transactions to direct investments and exits. Cubera advises a range of private equity secondary funds and employs 20 people in Oslo and Stockholm.