Buyout deals in the energy sector began their takeoff last year, and the rush to take ownership in these types of companies has yet to die down.
Sources say the California energy crisis has contributed to a greater awareness of the sector among investors by demonstrating that energy interests are desperate for growth and improvement. Mergers in the sector have also led to divestitures, with buyout firms poised to pounce on the orphaned companies.
“[The recent activity] is one of the pleasant outcomes that results from being a long-time investor and dealing with the cyclicality of energy prices,” said Christopher Behrens, a general partner with long-time energy investors J.P. Morgan Partners. “But it’s also because of more fundamental trends in the power industry in the last year.”
Although only two buyout deals in the energy sector have closed since the beginning of the year o totaling more than $1.6 billion, the selling of assets has become a priority in this unpredictable financial climate.
On the buy-side, one deal in particular – First Reserve Corp. and Odyssey Investments Partners’ purchase of