North American Energy Partners, Inc.
Fund: Genstar III
IPO: November 22, 2006
Secondary Offering: August 7, 2007
Opportunity
North American Energy Partners, Inc. (“NAEPI”) is a provider of outsourced construction services to the major oil and gas companies developing the oil sands in the Athabasca region of northeastern Alberta, Canada. In addition, NAEPI provides coal and diamond mine infrastructure services and civil construction services primarily in western Canada.
Capital investment in the oil sands region had grown dramatically over the decade prior to the investment, and Genstar believed it would continue to grow over the following decade. Genstar believed that NAEPI, as a provider of critical construction services in both the project start-up and site expansion phases of oil sands development, was well-positioned to benefit from the expected growth in the region over the following five to ten years. Genstar believed that given the increased political instability in the Persian Gulf area, as well as other oil rich areas such as Venezuela and Nigeria, there would likely continue to be an emphasis by the U.S. on securing sources of oil in politically stable geographies.
On November 26, 2003, Genstar III acquired NAEPI in partnership with the Sterling Group, Perry Strategic Capital, the Stephens Group, and BNP Paribas.
Strategy
As part of Genstar’s initiative to transform NAEPI from a family-owned business to a sophisticated and professional platform, the Firm assisted in the recruitment of Rodney J. Ruston in May 2005. Mr. Ruston joined NAEPI as its President and Chief Executive Officer, previously having served as Chief Executive Officer of Ticor Limited, an Australian raw materials company. Mr. Ruston’s demonstrated leadership ability and experience has had a significant positive impact on the Company.
Result
After three years of ownership by Genstar III, NAEPI had grown from $402 million in revenue to $526 million, while EBITDA increased from $86 million to $112 million. In 2006 and 2007, NAEPI completed an initial public & secondary offering of common stock, in which Genstar III sold its interest in the Company.