Templeton acquires 19.3% stake in Halcyon Energy

A private equity fund headed by Mark Mobius and managed by Templeton Asset Management has acquired a minority stake in the Singapore-based oil and gas industry service provider.

Templeton Strategic Emerging Markets Fund (TSEMF) III has acquired a 19.3 percent stake in Halcyon Energy, a Singapore-headquartered engineering and construction services provider for the offshore oil and gas industry, for an undisclosed sum.

The investment, which was made in the form of redeemable convertible preference shares, has a five year maturity and gives Templeton active involvement at the board level, Halcyon said in a statement.

Halcyon has a compelling business model to address the offshore energy services sector, Mark Mobius, chairman of Templeton Asset Management, said in a statement. The company will use the capital to expand its operations through organic growth and mergers and acquisitions.

In May, Halcyon was one of the bidders for UK private equity firm 3i’s stake in deepwater mooring specialist Franklin Offshore, competing with the likes of HSBC Private Equity and reportedly emerging markets private equity firm Actis. However, In June, Reuters reported 3i scrapped plans for a sale of its stake as the bids that came in were lower than expected.

Halcyon owns and operates a group of offshore engineering and fabrication businesses. The company’s revenues for 2008 stood at S$127 million (90 million; €61.5 million). It is a subsidiary of Halcyon Investment Corporation.

TSEMF III is a $147.7 million fund with an initial term of six years that can be extended to 10 years, Templeton said. The fund primarily makes private investments in public equity and investments in unlisted companies throughout the emerging markets. The fund is managed by Templeton Asset Management, which has Asian offices in Hong Kong, Mumbai, Seoul, Shanghai and Singapore. The emerging markets team at Templeton Asset Management manages assets of more than $25 billion as of August 2009.