HitecVision Private Equity AS

Transcription

1 HITEC VISION HitecVision Private Equity AS First six months 2006

2 HitecVision Private Equity AS 1 st half year 2006 HitecVision has had a good six months. Some highlights are: Operating revenues of NOK million and net income of NOK 88.2 million for the first six months. We have partially exited Energivekst s portfolio company Scandpower Petroleum Technology. Distributions to HitecVision are expected to be about NOK 56 million, most of which is expected to be received later in We received a NOK 87.5 million distribution from the Energivekst fund, on the basis of the fund s realization of portfolio companies APL and Revus Energy in In May, we held the final close on our new fund, HitecVision Private Equity IV LP, bringing the capital of our funds to about NOK 2.5 billion, and making HitecVision one of the top three private equity fund managers in Norway. The fund has received capital commitments from leading Nordic investors totalling USD 300 million, and our management fees from the fund will be USD 5.25 million (NOK 33 million) per year during the fund s investment period. Our funds have had a very active period: In Energivekst we have made follow-on investments in all portfolio companies, in addition to the SPT exit. Our new fund HitecVision Private Equity IV has made three investments and announced a letter of intent for a fourth. Based on the establishment of the new fund we have implemented a growth plan, and anticipate doubling the size of the organization from 2005 to OUR BUSINESS HitecVision Private Equity (HitecVision) is a private equity fund manager. Such companies have three sources of revenue: Management fees from funds under management; share of profits from funds generating returns above the agreed hurdle rate; and returns on direct investments in managed funds, made from the company s own balance sheet. HitecVision currently manages two funds, with a total capital base of about NOK 2.5 billion. The funds are: Energivekst, a NOK 690 million fund established in 2002; and HitecVision Private Equity IV, a USD 300 million ( NOK 1.9 billion) established in The funds invest in growth capital and buy-outs within the oil and gas sector in Europe and North America. FUNDRAISING Following a very successful fundraising in Q4 2005, our new fund HitecVision Private Equity IV held its first closing on the 24 th January 2006, with commitments totalling USD 283 million, against an original target for the whole fund of USD 200 million. A second closing was held on the 31 st May, bringing the fund to its maximum size of USD 300 million ( NOK 1.9 billion). We are pleased to be able to count most of the major institutional investors in Norway amongst the investors in the fund, as well as selected major investors from Sweden, Denmark and Finland. FUND DETAILS: ENERGIVEKST AS Key data: Committed capital: 690 MNOK HitecVision Private Equity s committed capital: 60 MNOK HitecVision Private Equity s paid-in capital: 37 MNOK Management fee: 2.5 % of committed capital Final closing: 30 th June 2002 Fund maturity: (+1+1 year) Energivekst is now fully invested, and the fund s remaining capital will be used for follow-up investments in its portfolio companies. The fund has invested in nine portfolio companies, and has made two full exits and one partial exit. The major event for the fund in the first half of 2006 is the partial realization the investment in Scandpower Petroleum Technology. The fund reduced its holding in Scandpower from 42.9 % (ordinary shares) to 14.4 %, realised cash proceeds of NOK million with a cost base of NOK 28.9 million, and retains a shareholding which provides a potential for further value creation in a leveraged structure. During the first six months of 2006, the fund has made follow-on investments in all of its other portfolio companies, totalling 55.6 MNOK.

3 ENERGIVEKST S PORTFOLIO COMPANIES: Scandpower Petroleum Technology AS SPT provides a combination of software and consultancy services relating to multiphase flow simulation and reservoir simulation. The company operates globally with head office in Norway. Pure Process Solutions AS PPS supplies advanced process technology to the oil and gas industry. The Group, owned by Statoil and Energivekst, includes companies in Norway and USA. RigNet, Inc. RigNet is a leading provider of high-performance communications networks and real-time-data services for the oil and gas industry. The Company operates globally with head office in Houston, USA. MTEM Ltd. MTEM, a spin-out from the University of Edinburgh, Scotland, markets the next generation electromagnetic method for detecting oil and gas. MTEM provides oil and gas companies with surveys that can show the location and depth of hydrocarbon reserves, thereby reducing their drilling risk. Knowledge Systems, Inc Knowledge Systems innovative Drillworks software, training and consulting services are used by most major and independent oil companies to avoid trouble while drilling and improve exploration and drilling success. The company is based in Houston, USA. Norse Cutting & Abandonment AS NCA has a leading position in several markets within cutting of steel and concrete. NCA s services, based on its proprietary cutting technologies, are used in connection with platform removals and modifications, and well slot recovery programs. The company is based in Norway with a Houston based subsidiary serving the Gulf of Mexico market. FUND DETAILS: HITECVISION PRIVATE EQUITY IV, LP Key data: Committed capital: 300 MUSD HitecVision Private Equity s committed capital: 9,75 MUSD HitecVision Private Equity s paid-in capital: 2,12 MUSD Management fee: 1.75 % of committed capital Final closing: 31 st May 2006 Fund maturity: HVPE IV started operations in January and has during the first six months made three investments: Two stand-alone investments and a major follow-up investment. We have also announced a letter of intent for a fourth investment, which is expected to close later in the year. The first investment is the growth capital and recapitalization investment in Vector International (see below for company description). HitecVision and Four Seasons Venture, who has been an investor in Vector since 2002, will invest equally up to NOK 230 million over the next two years, enabling the company both to finance its organic growth ambitions and to pursue selected acquisitions. The second stand-alone investment is the public-toprivate acquisition of Technor ASA (see below for company description). HVPE IV has invested about NOK 300 million, with acquisition financing being provided by Sparebank1 SR-Bank. As a major follow-up investment, we have acquired Bennex AS, a long established supplier of valves and subsea cabling systems. The company is a good strategic fit with Technor, and the companies are in the process of merging. We have also announced a letter of intent to make a major investment in the Aarbakke Group, a leading supplier of precision manufacturing services to the oil and gas industry. Norwegian Energy Company AS (Noreco) Noreco is an independent oil company, founded in Stavanger in The company is building a strong pan-north Sea presence as a base for further international expansion.

4 HVPE IV S PORTFOLIO COMPANIES: Vector International AS Vector International is a leading provider of specialist flanges and other pipe connectors to the oil, gas and petrochemical industries. The company operates out of main offices in Norway and Wales, with sales offices in Scotland, England, the Netherlands, Dubai, Malaysia, Australia and USA. The company s main products have strong market positions and have shown rapid growth over the last years. Technor ASA The Technor Group manufactures and distributes electronic, electro-mechanic and flow control products to niche markets within the oil and gas industry, including refining, petrochemical and LNG production, processing and transportation. Technor has operations in Norway, France, England and UAE. Following the acquisition of Bennex, Technor will also have a subsea division. FINANCIAL PERFORMANCE HitecVision had operating revenues of MNOK in the first half of Returns on the investment in Energivekst totalled 87.5 MNOK, while advisory fees from Energivekst represent 7.1 MNOK and advisory fees from HVPE IV amount to 14.1 MNOK. Operating income for the first six months is 87.6 MNOK, and net income for the period is 88.3 MNOK. Distributions to HitecVision from Energivekst s partial realization of the Scandpower investment are expected to be about NOK 56 million, most of which is expected to be received later in Stavanger, 21 st August 2006 The Board of HitecVision Private Equity AS

5 HitecVision Private Equity AS (all figures in NOK 1.000) INCOME STATEMENT 30/06/ /12/2005 Operating revenues Operating expenses Depreciation & amortisation Operating income/-loss Net financial items Income/-loss before taxes Net income/-loss for the period BALANCE SHEET Intangible fixed assets Fixed assets Financial assets Total receivables Investments Energivekst Investments HVPE IV Cash and bank Total assets Total equity Long term liabilities - - Payable tax Payable dividend Liabilities to financial institutions - - Other payables Total equity and liabilities CASH FLOW Income/ -loss before taxes Depreciation and other adjustments Change in working capital Cash flow from operations Cash flow from investments Paid dividend Cash flow from financing activities Change in cash funds Cash funds at start of the period Cash funds at end of the period

6 SHAREHOLDER MATTERS As at 18th August 2006, HitecVision Private Equity AS had 291 registered shareholders. The HitecVision share is listed on the Norwegian Over The Counter (NOTC) market organised by the Norwegian Securities Dealers Association, and the company has signed a voluntary disclosure undertaking. HitecVision publishes annual and half year reports. It is envisaged that from 2007, half year reports will only be published electronically, via the NOTC system and on the company s web page HITEC VISION HITECVISION PRIVATE EQUITY AS P O Box 8120, 4068 Stavanger, Norway Tel: Fax: