An investor group led by Advent International is to acquire a minority interest in Oleoducto Central S.A., a Colombian crude oil transportation system. Colombia’s two largest pension funds Sociedad Administradora de Fondos de Pensiones y Cesantías Porvenir S.A. and Administradora de Fondos de Pensiones y Cesantía Protección S.A. will join Advent, through a co-investment fund formed by Advent. Completion of the transaction is subject to customary closing conditions and is expected to take place within the next few weeks.
An investor group led by global private equity firm Advent International today announced that it has signed a definitive agreement to acquire a minority interest in Oleoducto Central S.A. (“Ocensa”), Colombia’s largest crude oil transportation system. Colombia’s two largest pension funds—Sociedad Administradora de Fondos de Pensiones y Cesantías Porvenir S.A. (“Porvenir”) and Administradora de Fondos de Pensiones y Cesantía Protección S.A. (“Protección”)—will join Advent, through a co-investment fund formed by Advent as a sponsor (“LAPEF V OC Co-Investment LP”), in purchasing approximately 22% of Ocensa from Talisman Energy Inc. (“Talisman”), Total Colombia Pipeline (“Total”) and Compañía Española de Petróleos S.A.U. (“CEPSA”). Cenit S.A.S. (“Cenit”), a wholly owned subsidiary of Ecopetrol S.A., Colombia’s largest integrated oil and gas company, will retain majority ownership of Ocensa. Completion of the transaction is subject to customary closing conditions and is expected to take place within the next few weeks.
Established in 1994, Ocensa manages Colombia’s largest crude oil pipeline. The system has an average pumping capacity of 590,000 barrels per day, with eight stations and four distinct segments extending nationally over a length of 830 kilometers. It is the main pipeline between Colombia’s Llanos region and the Atlantic Coast and moves approximately 60% of Colombia’s crude oil production, which represents roughly 70% of all exports coming out of the country.
The Advent-led investor group will work closely with Cenit and the company’s management team to support the continued growth of the business. Ocensa is strategically well positioned to manage the continued expansion of Colombia’s crude oil output, which has nearly doubled in the past six years and is expected to increase further in the coming years. Ocensa’s system is running at close to 100% utilization, and the company has begun a staged expansion project to increase capacity by approximately 30%.
“We are pleased to welcome the Advent-led investor group as new investors in Ocensa, and we are excited to continue working with all of our shareholders to grow the company and ensure this critical asset maintains its proven track record of safety and reliability,” said Luisa Lafaurie, President of Ocensa. “We also would like to thank Talisman, Total and CEPSA for their contributions to our success.”
Mauricio Salgar, a Managing Director at Advent and head of its Bogotá office, commented, “Ocensa is a core strategic asset for Colombia given the importance of oil exports to the country’s economy. Additionally, the company operates the most cost-efficient and reliable pipeline in the country and has an attractive business model. We look forward to applying our expertise and working with our new partners to ensure that the company maintains its leadership position while continuing to meet the infrastructure needs of Colombia’s expanding energy industry.”
Gurinder Grewal, a Principal in Advent’s Boston office who helps coordinate the firm’s global activities in the energy sector, said, “Ocensa is our fourth transaction in the energy sector in the past three years, following investments in BOS Solutions, NCS Energy Services and P2 Energy Solutions, and highlights our growing and now global activity in the sector. As with our other investments, we are excited to be partnering with a great management team and look forward to working with them in the coming years.”
Hal Kvisle, Talisman CEO, said, “The Ocensa pipeline forms an integral part of Colombia’s crude oil transportation system, and retaining our capacity rights through this transaction enables Talisman to maintain our competitive advantage, transporting oil from our own operations and generating third-party revenue from any surplus capacity.”
Ladislas Paszkiewicz, President Americas for Total Exploration & Production, commented, “The Ocensa story is a successful one, and we’ve been very proud to have been associated with it since the beginning. Ocensa has a bright future with some sound expansion projects in a tight transportation market, and we are confident that Advent International and its partners will provide valuable input. As Total is retaining all of its transportation rights with Ocensa through its local subsidiary Total E&P Colombie, we will continue to be involved in the oil transportation activity in Colombia.”
Pedro Miró, CEPSA CEO, commented, “The Ocensa management, jointly with its shareholders, have over time created a very professional company, which I am sure will remain so in the future. Advent’s participation is a step forward in consolidating Ocensa as a pipeline operator, while upstream companies like ours will focus on increasing oil and gas production from Colombian fields, both current and new to come.”
Ocensa is Advent’s third investment in Colombia since opening its Bogotá office in 2011 and fits with the firm’s strategy of investing in sectors where it has deep expertise globally, including energy, pharmaceuticals and financial services. In November 2011, Advent acquired a majority interest in Biotoscana, a licensor and marketer of specialty pharmaceutical products in Colombia, and in June 2013 it agreed to acquire 50% of Alianza Fiduciaria, the country’s leading independent trust and asset management company. Advent has been investing in Latin America for 17 years, during which time it has backed 47 companies across eight countries.
J.P. Morgan Securities LLC (lead advisor), Banco Itaú BBA S.A., Citigroup Global Markets Inc. and Natixis, New York Branch provided financial advice to Advent on the Ocensa investment. Banco Itaú BBA S.A., Citigroup Global Markets Inc. and Natixis, New York Branch provided committed financing for the transaction. Gómez-Pinzón Zuleta Abogados S.A. and Weil, Gotshal & Manges LLP acted as legal counsel, and Ernst & Young Ltda. (lead advisor) and KPMG LLP acted as tax advisors to Advent. Talisman was jointly advised by BMO Nesbitt Burns Inc. and Credit Suisse Securities. Total and CEPSA were advised by TD Securities.
About Advent International
Founded in 1984, Advent International is one of the largest and most experienced global investors dedicated solely to private equity. Since inception, the firm has invested in more than 280 buyout transactions in 39 countries, achieving over 230 full or partial exits, and today has $31.6 billion in assets under management. With offices on four continents, Advent has established a globally integrated team of over 170 investment professionals across North America, Europe, Latin America and Asia. The firm focuses on growth and traditional buyout and strategic repositioning transactions across five core sectors, including business and financial services; healthcare; industrial; retail, consumer and leisure; and technology, media and telecoms. After 29 years dedicated to international investing, Advent remains committed to partnering with management teams to deliver sustained revenue and earnings growth for portfolio companies. For more information, visit www.adventinternational.com.
About LAPEF V OC Co-Investors
Porvenir is a Colombian corporation, incorporated in 1991, with principal domicile in the city of Bogotá D.C., Colombia. The shareholders of Porvenir are Grupo Aval Acciones y Valores S.A., Banco de Bogotá S.A., Banco de Occidente S.A., Fiduciaria de Bogotá S.A. and Fiduciaria de Occidente S.A. Porvenir manages mandatory, voluntary pension and accumulated severance payment funds, as defined in article 30 et seq. of the Colombian General Financial System Statute, and after completing its acquisition process with AFP Horizonte by the end of December 2013 will have approximately US$40 billion in assets under management; as such, it is subject to the control and supervision of the Colombian Superintendence of Finance.
Protección is the second-largest pension fund administrator in Colombia with more than 20 years of experience. Currently, Protección manages more than US$27.4 billion in assets under management and approximately 4.5 million affiliates equivalent to a 36.9% and 32.3% market share, respectively. In 2012, Protección merged with ING Pensiones y Cesantías and strengthened its position as the second-largest pension fund manager in Colombia.
Talisman Energy Inc. is a global upstream oil and gas company, headquartered in Canada. Talisman has two main operating areas: the Americas (North America and Colombia), and Asia-Pacific. Talisman is committed to conducting business safely, in a socially and environmentally responsible manner, and is included in the Dow Jones Sustainability (North America) Index. Talisman is listed on the Toronto and New York stock exchanges under the symbol TLM.
Total is one of the largest integrated oil and gas companies in the world, with activities in more than 130 countries. The Group is also a first-rank player in chemicals. Its 96,000 employees put their expertise to work in every part of the industry—exploration and production of oil and natural gas, refining and marketing, new energies, trading, and chemicals. Total is working to help satisfy the global demand for energy, both today and tomorrow. www.total.com
CEPSA is an integrated energy company operating at every stage of the oil value chain, with more than 11,000 employees. It is engaged in petroleum and natural gas exploration and production activities; refining, the transport and sale of crude oil derivatives; petrochemicals, gas, and electricity. CEPSA is Spain’s fourth-largest industrial group in terms of turnover and has been in the market for more than 80 years. Through progressive internationalization of its activities, CEPSA also has business interests in Colombia, Algeria, Brazil, Canada, Panama, Peru, China and Portugal and sells its products all over the world. CEPSA is wholly owned by International Petroleum Investment Company of Abu Dhabi.
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