Advent-led group to buy 22% of Colombia pipeline

An investor group led by Boston-based private equity firm Advent International has signed a definitive agreement to acquire 22 percent of Oleoducto Central (Ocensa), Colombia’s largest crude oil transportation system, the firm said in a statement. Financial terms of the transaction were not disclosed.

Colombia’s two largest pension funds – Sociedad Administradora de Fondos de Pensiones y Cesantias Porvenir (Porvenir) and Administradora de Fondos de Pensiones y Cesantías Protección (Protección) – will invest with Advent through a co-investment fund formed by the private equity firm as a sponsor.

The group will acquire the minority stake from Talisman Energy, Total Colombia Pipeline and Compañia Española de Petróleos, while Cenit, a wholly-owned subsidiary of Colombian oil and gas company Ecopetrol, will retain majority ownership of Ocensa.

The pipeline, which has an average pumping capacity of 590,000 barrels per day, moves approximately 60 percent of Colombia’s crude oil production. It is close to 100 percent of utilisation, according to the statement, but an expansion project aimed at increasing capacity by 30 percent is under way.

“Ocensa is our fourth transaction in the energy sector in the past three years, following investments in BOS Solutions, NCS Energy Services, and P2 Energy Solutions, and highlights our growing and now global activity in the sector,” said Gurinder Grewal, a principal at Advent’s Boston office who helps coordinate the firm’s global activities in the energy sector.

It is Advent’s third investment in Colombia since it opened its office in Bogotá in 2011. In November of that year, Advent acquired a majority interest in Biotoscana, a licensor and marketer of specialty pharmaceutical products; and in June 2013 it agreed to acquire 50 percent of Alianza Fiduciaria, an independent trust and asset management company.

The transaction is expected to be completed within the next few weeks, Advent said.

Founded in 1984, Advent has invested in more than 280 buyout transactions in 39 countries and currently has $31.6 billion in assets under management. In addition to its Boston headquarters, the firm also has offices in New York, western and central Europe, Asia, and South America.