M&A Deal Summary

Arcapita Acquires Varel Energy Solutions

On November 5, 2007, asset manager Arcapita acquired energy services and equipment company Varel Energy Solutions from KRG Capital Partners, American Capital and Lariat Partners for 369M USD

Acquisition Highlights
  • This is Arcapita’s 2nd transaction in the Energy Services and Equipment sector.
  • This is Arcapita’s 5th largest (disclosed) transaction.
  • This is Arcapita’s 26th transaction in the United States.
  • This is Arcapita’s 2nd transaction in Texas.
Investment Fate
  • Varel Energy Solutions was sold to a strategic buyer in 2014 for 740M USD.
  • Varel Energy Solutions was divested to a consortium of buyers in 2019.

M&A Deal Summary

Date 2007-11-05
Target Varel Energy Solutions
Sector Energy Services and Equipment
Buyer(s) Arcapita
Sellers(s) KRG Capital Partners
American Capital
Lariat Partners
Deal Type Secondary Buyout
Deal Value 369M USD

Target

Varel Energy Solutions

Houston, Texas, United States
website
Varel Energy Solutions is a manufacturer and supplier of high-quality roller cone and fixed cutter drill bits. The company's proprietary design capabilities, efficient manufacturing, and global sales force uniquely position to provide drill bits that deliver outstanding performance and value to customers. VIES is comprised of three business units: Varel Oil & Gas Drill Bits, Varel Mining, and Downhole Products. Varel Energy Solutions was founded in 1947 and is based in Houston, Texas.

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Buyer(S) 1

Buyer

Arcapita

Manama, Bahrain

Investor Investor Investor Investor Investor

website


Category Asset Manager
Founded 1997
Size Mega
Type Sector Agnostic
DESCRIPTION

Arcapita is a private investment firm with separate investment disciplines spanning venture capital, corporate investment, real estate, and asset-based investments. Arcapita's Corporate Investment practice looks to acquire controlling interests in established companies valued between $50 million and $500 million. Sectors of interest include consumer products/services, healthcare, energy, technology, and manufacturing. Arcapita's infrastructure team looks to invest $50 to $300 million in energy, water, and transportation assets. The Firm will consider opportunities around the globe; including the United States, Latin America, Russia, China, Europe, Middle-East, and India. Arcapita was formed 1997 and has offices in Manama, Bahrain; Atlanta, Georgia; London; and Singapore.


DEAL STATS #
Overall 35 of 47
Sector (Energy Services and Equipment) 2 of 2
Type (Secondary Buyout) 8 of 14
State (Texas) 2 of 2
Country (United States) 26 of 32
Year (2007) 6 of 7
Size (of disclosed) 5 of 9
PREVIOUS DEAL
DATE TARGET DEAL TYPE VALUE
2007-11-01 Polygel Industries

Singapore, Singapore

Polygel Industries is a diversified Performance and Specialty Chemicals business offering over 50 products, including a wide range of Organic Titanates, Zirconates, Phosphates, Phosphites (Organometallic Chemicals), and Phenolics, for applications such as Catalysts for Refineries, Petrochemicals, downstream Polymer processing, Printing Inks, Paints, and Coating Industries, Lubricants, Glass coatings, Emission control, Oleochemicals, Pharmaceuticals, Food Processing & Oil fracking. Polygel Industries was founded in 1997 and is based in Singapore.

Buy -
FOLLOWING DEAL
DATE TARGET DEAL TYPE VALUE
2007-12-20 PODS Enterprises

Clearwater, Florida, United States

PODS Enterprises is a provider of portable storage and moving solutions for residential and business customers. PODS Enterprises is based in Clearwater, Florida.

Buy $430M

Seller(S) 3

SELLER

KRG Capital Partners

Denver, Colorado, United States

Investor Investor Investor Investor Investor

website


Category Private Equity Firm
Founded 1996
PE ASSETS 4.4B USD
Size Large
Type Sector Agnostic
DESCRIPTION

KRG Capital Partners is a private equity investment firm focused on acquiring controlling interests in middle-market companies. Prospective transaction situations include owner recapitalizations, management buyouts of private companies, mangement buyouts of corporate divisions, outright purchases, and family successions. Target companies typically generate sales of $35 to $400 million and EBITDA of $10 to $100 million. Sectors of interest include healthcare services, medical technology and life sciences; business services and distribution; construction materials and services; transportation services; marketing; specialty finance and insurance; aerospace, defense, and government services; energy services and products; and infrastructure. KRG primarily looks for opportunities located in the US and Canada but will selectively consider investments in Western Europe. KRG was formed in 1996 and is based in Denver, Colorado with additional offices in Mill Valley, California and Las Vegas, Nevada.


DEAL STATS #
Overall 18 of 41
Sector (Energy Services and Equipment) 1 of 1
Type (Secondary Buyout) 4 of 14
State (Texas) 3 of 5
Country (United States) 18 of 40
Year (2007) 2 of 2
Size (of disclosed) 8 of 13
PREVIOUS DEAL
DATE TARGET DEAL TYPE VALUE
2007-05-01 Case Logic Wireless

Longmont, Colorado, United States

Case Logic Wireless, Inc. is a designer and marketer of storage products and accessories for the audio, computer, photo/video, DVD, automotive and recreational markets.

Sell -
FOLLOWING DEAL
DATE TARGET DEAL TYPE VALUE
2008-02-01 UniversalPegasus International

Houston, Texas, United States

UniversalPegasus International is an engineering and design firm that provides its clients with a broad range of engineering, inspection, survey, and project management services focused on the gathering, transmission, and processing of hydrocarbons and hydrocarbon-based products both onshore and offshore domestic and international markets. UniversalPegasus International was founded in 2008 and is based in Houston, Texas.

Buy -
SELLER

American Capital

website


Category Private Equity Firm
Founded 1997
PE ASSETS 22.0B USD
Size Mega
Type Sector Agnostic
DESCRIPTION

American Capital was a publicly traded buyout and mezzanine investment firm. American Capital invested in buyouts, growth capital financings, acquistion financings, and recapitalizations. The Firm looked to finance businesses with at least $4 million in EBITDA and valued between $20 and $500 million. American Capital ws a generalist firm with broad interest in traditional industries such as manufacturing, distribution, and services. American Capital's European investment affiliate is European Capital. European Capital looked to invest $10 to $600 million of equity, mezzanine, and/or senior debt in similar opportunities across Europe. American Capital was formed in 1997 and in January 2017, merged with Ares Capital Management.


DEAL STATS #
Overall 76 of 194
Sector (Energy Services and Equipment) 2 of 4
Type (Secondary Buyout) 24 of 71
State (Texas) 7 of 15
Country (United States) 75 of 186
Year (2007) 19 of 22
Size (of disclosed) 18 of 56
PREVIOUS DEAL
DATE TARGET DEAL TYPE VALUE
2007-11-05 Rug Doctor

Plano, Texas, United States

Rug Doctor is a manufacturer and marketer of premium steam cleaning carpet care machines rented and sold to consumers. Rug Doctor was founded in 1998 and is based in Plano, Texas.

Buy -
FOLLOWING DEAL
DATE TARGET DEAL TYPE VALUE
2007-11-13 Stravina Operating

Chatsworth, California, United States

Stravina Operating Co. LLC is a designer, manufacturer and distributor of personalized impulse-purchase novelty and souvenir items. Stravina specializes in a variety of personalized items that can be customized to specific locations.

Sell -
DESCRIPTION

Lariat Partners is a lower middle-market private equity firm focused on buy-and-build investments of recurring revenue businesses. Target sectors include consumer products, energy and environmental services, food, healthcare services, marine services, safety, and specialty distribution. Prospective companies are generally profitable with $2 to $20 million of EBITDA. Lariat Partners was formed in 2013 and is based in Denver, Colorado.


DEAL STATS #
Overall 1 of 7
Sector (Energy Services and Equipment) 1 of 1
Type (Secondary Buyout) 1 of 4
State (Texas) 1 of 1
Country (United States) 1 of 7
Year (2007) 1 of 1
Size (of disclosed) 1 of 1
PREVIOUS DEAL
DATE TARGET DEAL TYPE VALUE
2005-06-01 Varel Energy Solutions

Houston, Texas, United States

Varel Energy Solutions is a manufacturer and supplier of high-quality roller cone and fixed cutter drill bits. The company's proprietary design capabilities, efficient manufacturing, and global sales force uniquely position to provide drill bits that deliver outstanding performance and value to customers. VIES is comprised of three business units: Varel Oil & Gas Drill Bits, Varel Mining, and Downhole Products. Varel Energy Solutions was founded in 1947 and is based in Houston, Texas.

Buy -
FOLLOWING DEAL
DATE TARGET DEAL TYPE VALUE
2013-11-13 Northern Seed

Butte, Montana, United States

Northern Seed provides quality seeds, seed treatment, and services to its growers. Northern Seed was founded in 2007 and is based in Butte, Montana.

Buy -