Ottawa’s Competition Bureau said it is challenging Thoma Bravo‘s recent acquisition of Aucerna, a Calgary-based provider of planning, execution and reserves solutions to the oil and gas industry.
The Bureau said Thoma Bravo now owns the two largest energy reserves software businesses in Canada, Aucerna and Quorum Software, a situation that is likely to “substantially lessen competition.”
The Bureau filed an application with the Competition Tribunal for an order requiring the U.S. private equity firm to sell one of its products, either Quorum’s MOSAIC or Aucerna’s Val Nav.
Thoma Bravo announced the acquisition of Aucerna, formerly known as 3esi-Enersight, in February.
Competition Bureau challenges Thoma Bravo’s acquisition of oil and gas reserves software firm Aucerna
OTTAWA, June 17, 2019 /CNW/ – To protect competition and innovation, the Competition Bureau is challenging Thoma Bravo’s recent acquisition of Aucerna, a company that offers reserves valuation and reporting software to Canadian oil and gas producers.
On June 14, 2019, the Bureau filed an application with the Competition Tribunal for an order requiring Thoma Bravo to sell one of its reserves software products – MOSAIC or Val Nav.
Thoma Bravo now owns the two largest oil and gas reserves software businesses in Canada – Quorum and Aucerna – who were previously one another’s closest rivals. That rivalry incented these businesses to regularly enhance MOSAIC and Val Nav.
Following its investigation, the Bureau found that the transaction is a merger to monopoly in the supply of reserves software in Canada to medium and large producers. The Bureau concluded that the transaction is likely to substantially lessen competition resulting in higher prices and lower quality of service for customers in Canada. Given that, prior to the acquisition, MOSAIC and Val Nav were each other’s only effective competitors, the loss in competition between them is also likely to significantly reduce innovation and product quality of reserves software in Canada.
The Bureau’s application will be available shortly on the Competition Tribunal’s website.
“Taking action in this matter is necessary to prevent monopoly control over the supply of oil reserves software in Canada. Oil and gas resources are a key driver of the Canadian economy. The Bureau will always seek to protect competition and innovation in this sector.”
– Matthew Boswell, Commissioner of Competition
Reserves software monitors, evaluates and generates reports related to estimated reserves of oil and gas wells. This provides oil and gas producers with key information that is central to strategic decision-making and compliance with regulatory requirements.
Thoma Bravo is an American private equity investment firm with head offices in San Francisco, California.
Aucerna, now owned by Thoma Bravo, is a Calgary-based company that provides oil and gas software solutions in Canada and other jurisdictions, including the provision of reserves software in Canada.
Quorum is an indirect wholly owned subsidiary of Thoma Bravo supplying oil and gas software solutions in Canada.
Mergers in Canada are subject to review by the Bureau to ensure they do not result in a substantial lessening or prevention of competition.
Merger Review Process Guidelines
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