Transaction: Divestments
Date: April 2012
Deal value: EUR 510 million
Process: Structured auction
Industry: Energy and utilities

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On February 3, 2012 NKT Holding (OMX: NKT) and Subsea 7 (OSE: SUBC) announced that they have entered into an agreement to sell NKT Flexibles to National Oilwell Varco (NYSE: NOV) for a total consideration of DKK 3.8 billion. The transaction is subject to customary closing conditions and is expected to close during the first half of 2012.

NKT Flexibles, a 51/49 joint venture between NKT Holding and Subsea 7, is a leading global supplier of highly engineered flexible pipe systems to the offshore oil and gas industry, including flow-lines, jumpers and flexible risers. In 2011 NKT Flexibles signed a DKK 9.7 billion four year supply framework agreement with Petrobras and is at the time of the transaction in the process of establishing a new production facility in Brazil that will more than double the company’s capacity. For 2011 NKT Flexibles recorded revenue of around DKK 1.5 billion with a pro forma EBITDA of DKK 301 million. NKT Flexibles employs approximately 700 people.

Having established NKT Flexibles as a JV in 1999, NKT Holding and Subsea 7 launched a strategic review process in September 2011 to explore strategic alternatives for the future development of NKT Flexibles in particular focusing on whether a new ownership would be better suited to support NKT Flexibles in its ongoing establishment in Brazil. Based on the strategic review NKT Holding and Subsea decided to divest NKT Flexibles to National Oilwell Varco.

National Oilwell Varco is a worldwide leader in the design, manufacture and sale of equipment and components used in oil and gas drilling and production operations, the provision of oilfield services, and supply chain integration services to the upstream oil and gas industry. NKT Flexibles with its highly technical design capability will be incorporated into the Rig Technology group and will significantly increase NOV’s footprint within the growing segment of offshore products for the oil and gas industry.

FIH Partners advised NKT Holding and Subsea 7 on the divestment of NKT Flexibles.

NKT Holding is one of Denmark's major industrial groups with a total of 9,200 employees and a revenue of DKK 14.5 billion in 2010. NKT Holding is active in a number of sectors including power cables, professional cleaning equipment and optical technology.

Subsea 7 is a leading seabed-to-surface engineering, construction and services contractor to the offshore energy industry worldwide. Subsea 7 provides integrated services, and plan, design and deliver complex projects in harsh and challenging environments. In 2010 Subsea recorded revenues of EUR 2.0 billion.