Vendor assistance in the oil and gas market

Accuracy provides vendor assistance for the disposal of a jointly owned company which designs and rents offshore access system units for the oil and gas market.

 

Context

 

The company was set up as a joint venture with two shareholders. Its products are used to transfer personnel from a vessel to offshore oil and gas installations, providing a safe and cost-effective alternative to helicopters, crew boats and jack-ups. The JV’s activities were no longer core to the shareholders’ businesses and required significant investment to remain competitive, and the shareholders therefore decided to sell.

 

How we helped

 

Since being founded, the company had only broken even once. We therefore had to design a way to present financials that would attract investors. We decided that a presentation by cash-generating unit was the best option.

There were various challenges as the level of financial information was poor: the finance department’s knowledge was limited and the accounting system had recently changed. We dived into the financial system to understand what information was available and how it could be used to prepare an analysis per operating unit.

Management also had difficulty in realistically forecasting the business. Additional obstacles included poor current trading performance, a lack of pipeline, the valuation of tangible assets and outstanding claims, all of which had to be addressed individually. With our historical insight developed during the project, we were able to assist Management in preparing their forecasts for the business.

 

Outcome

 

Our analysis required consolidating all projects, an exercise that the client had never performed. It gave potential investors a realistic view of the company’s profit-generating ability and any potential upsides and vulnerabilities.

Our focussed approach enabled both the buyer and seller to strike an agreement. The sale was originally intended to be a share deal, but considering the number of large pending claims, the final buyer opted for an asset deal.

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