Aberdeen energy owners ‘looking for exit’

A surge in energy deal activity will betoken “the year of the exit” in Granite City, forecasts a leading Aberdeen-based corporate finance house.

North Sea deal activity was slow in 2017 as the oil price remained low by historical standards, said Tom Faichnie, managing director of Hall Morrice Corporate Finance.

But he forecast that the business landscape in Aberdeen would be transformed in 2018, with January kicking off a “very intense period” for both buyers and sellers. Faichnie said: “I predict that in 2018 we are going to see more companies coming up for sale, not only at the bigger end of the market, but what would be considered the smaller end too – companies that sit within the £2 million to £10m revenue bracket.

“Oil is still a volatile commodity and the North Sea remains a long way off a full recovery. However, over the past two years companies have seen their financials stabilise and reach a steady base.

“The worst is over and order books are tipping in the right direction. There is now a level of confidence that has been lacking for a long time and shareholders feel that they have now built their businesses back up to a point where the time is right to sell.”

The Hall Morrice boss said that another factor likely to drive sales of energy assets was that many owners had been through similar cycles before.

“They simply no longer want to go through another round of ramping a business up and developing it to the pre-downturn levels. They are saying, ‘It’s now sellable, let’s exit.’” 0 Tom Faichnie: financial backdrop has ‘stabilised’