Industrial Growth Partners has agreed to acquire Houston-based Southern Petroleum Laboratories Inc, a provider of hydrocarbon measurement, analysis and reporting services for oil and gas sector. The seller is Hastings Equity Partners. No financial terms were disclosed.
HOUSTON, Oct. 4, 2016 /PRNewswire/ — Hastings Equity Partners (Hastings), a private equity firm focused on investing in lower middle-market energy services and equipment companies, is excited to announce the sale of Southern Petroleum Laboratories, Inc. (SPL) to Industrial Growth Partners (IGP). A San Francisco-based specialist private investment partnership, IGP focuses exclusively on investing in middle-market companies in the industrial sector. The company has raised $2.2 billion of equity capital since its inception in 1997.
Based in Houston, Texas, SPL is the leading independent provider of outsourced hydrocarbon measurement, analysis and reporting services for oil and gas production. With a 70-year history of consistent operational excellence, SPL is a trusted provider of laboratory, field and production allocation services across its 14 strategic locations.
“We couldn’t be more appreciative of the experienced and talented senior management team at SPL. Thanks to the hard work and energy of the entire SPL team, the business prospered during an extremely challenging time in the energy sector,” said Ted Patton, managing director of Hastings. “Management and employees consistently demonstrated why SPL is the best in class service provider. We feel IGP is the ideal partner to continue growing the SPL platform.”
“The Hastings team guided my third generation family business into a new era,” said Christopher Brown, shareholder of SPL. “With their support, the business expanded over the last two years despite a market presenting unlimited challenges. I’m proud of what we accomplished and I look forward to seeing what the future holds for SPL and IGP.”
Hastings purchased a majority interest in SPL in the summer of 2014, in addition to various funds advised by Jordan/Zalaznick Advisers, Inc. and The Edgewater Funds. The 2014 sale was the first exit from Hastings Fund III, which closed on $172 million in late 2014. Hastings is pleased with the results of this investment, which generated nearly a three-time cash-on-cash return with a gross IRR1 of 75 percent. The sale of SPL marks one of many successful exits in 2016 by private equity funds in the energy services sector.
Harris Williams & Co. served as exclusive financial advisor to SPL for the transaction, and Locke Lord, LLP served as legal counsel to the shareholders of SPL in the transaction.
1 The gross IRR is calculated using actual monthly cash flows to the Fund from the investment beginning with the month of initial investment and continuing through the exit date, plus the estimated value of future payments.
Hastings does not present net IRRs for individual investments because carried interest, management fees and fund expenses (all of which are substantial and will have the effect of lowering the gross IRR return shown above) are calculated based on the overall performance of the fund and not on a deal-specific basis
About Hastings Equity
Hastings Equity Partners is a private equity firm focused on investing in lower, middle-market energy services and equipment businesses. Hastings’ approach is to leverage the extensive operational experience of the firm’s managers and investors, many of whom are active or former CEOs of Fortune 1000 companies. In addition, due to the firm’s expanding portfolio of oilfield services companies, it is able to share best practices, technology trends and contacts across its platform to ensure that all of its investments benefit. Hastings strives to help its portfolio companies create sustained value for their employees, customers, and investment partners. Learn more at www.hastingsequity.com.
About SPL, Inc.
Headquartered in Houston, TX, SPL is recognized globally as the industry leader in laboratory analysis, measurement, and allocation services of hydrocarbon products for the oil and gas industry. Learn more at www.spl-inc.com.
Industrial Growth Partners, founded in 1997, is a San Francisco-based specialist private investment partnership with $2.2 billion of equity capital raised since inception. The firm invests exclusively in middle-market companies in the industrial sector in partnership with management teams.