New York and Toronto-based private equity firm CAI Capital Partners has agreed to buy Canadian oil equipment maker GLM Tanks & Equipment from Houston-based Tanglewood Investments. Terms were not disclosed.
CAI is expanding its presence in the Alberta oil and gas sector in recent years. In 1999 it invested in Calgary-based Vista Midstream Solutions.
“There’s been a great need for capital to support all the exploration and production activity that’s gone on in Alberta in the last few years, and is expected to continue here,” said managing director Tracey McVicar in an interview with Private Equity Online.
GLM’s concentration in the more lucrative oil-sands extraction and oil drilling industries in Alberta was a key attraction, said McVicar. “Natural-gas prices have fallen by half since last year, and you know what oil prices have done. So it was really interesting to us to find a firm that was not exposed to gas drilling, but really exposed to the oil-sands activity and the oil drilling.”
A new GLM plant is scheduled to open in October, and CAI has some acquisitions in mind for potential add-ons. “They have told us that they’d like to be in the rig refurbishment and repair business,” added McVicar. “There’s a lot of demand for that kind of service.”
CAI was founded in 1989 and is in its third fund. It has invested or placed with co-investors more than $1 billion in equity or equity-related investments, primarily in Canadian companies.