Scottish-UAE oil & gas consultancy brokers Al Yaseah | Norco deal

13 December 2017

Al Yaseah, an oil and gas industry supply and service provider based in Abu Dhabi, has signed a joint venture with stored electrical energy system specialists Norco Group of Aberdeen, in a transaction brokered by Oil & Gas Innovation UAE.

Operating out of offices in Aberdeen, UK, and the UAE, the technology development and transfer consulting firm, Oil and Gas Innovation (O&G), was set up as an initiative to forge greater partnerships between Scottish companies and their Middle Eastern counterparts working in the oil and gas sector in the UAE.

According to a survey conducted by Scottish Development International, the Middle East is Scotland’s second-largest export market in the oil and gas field, valued at up to £2 billion, while the UAE is the primary trade partner for Scottish oil and gas companies operating in the MENA region.Oil & Gas Innovation UAE brokers Al Yaseah | Norco Group partnership

In Scotland, O&G is seeking to capitalise on the country’s industry-wide reputation for innovation, borne from its years of technological advancement and experience in the North Sea, by helping to identify clients in the UAE for Scottish oil and gas technology companies as well as establish joint ventures and partnerships between companies based in the respective nations. 

In addition to its brokerage service, the firm, with its local knowledge and established network of contacts across the Middle East and North Africa, further offers its international clients assistance in establishing a presence in the region, along with consulting services in operational efficiencies and cost cutting in the oil and gas sector. 

Al Yaseah and Norco Group have been in discussions for “some months” prior to completing the deal, said Al Yaseah managing director, Khalid Mohamed Helal Feraih Al Qubaisi, which included joint meetings held at the premises of Abu Dhabi National Oil Company (ADNOC). The managing director of Al Yaseah added that he believes there is a large demand for Norco Group’s services, further stating, “We will work together to become the leading provider of battery-backed systems and associated services in the UAE.” 

O&G’s founder and CEO, Brian Gribble, a three-time recipient of the Queen’s Award for International Trade, said of their latest completed partnership deal, “I am very pleased that this joint venture has come together, as it will be win-win for both Norco Group and Al Yaseah. The synergies between the two groups and the demand for Norco's expertise will boost for the availability of these services in the Middle East.”

Uber bids on future with Careem, but outcome may depend on the past

01 April 2019

With ride-hailing giant Uber buying local success story Careem for a cool $3.1 billion during the past week, a timely report from PwC looks into creating value from M&A over the long-term. 

M&A is increasingly part of corporate activity, as companies seek to pick up market access, knowledge, new products or key talent. However, new analysis shows that value creation remains difficult to achieve, while many companies overstate their belief that a deal created value in the long term. New analysis from PwC shows that successful value creators have a long-term plan, are focused on value creation, and keep their eye on engagement with management and the retention of key staff.

M&A has for the past decade boomed, as private equity (PE) players and corporates have both sought to acquire companies; the former to boost, among others, their portfolio holdings in a period of high-speed growth and low-cost credit, and the latter to augment their innovativeness, expand product lines or access new markets. M&A deal value hit recent record levels in 2015, at $3.8 trillion, before falling marginally to $3.4 trillion last year.Value creation in acquisitions and divestmentsYet, acquiring companies remains a risky proposition, with outcomes not always positive for long-term growth. Current market turbulence is creating value uncertainties, while rapid technological change and global regulation environments contribute further ambiguity. Landing deals that prove to have long-term value has become ever-more tricky. To better understand the market, PwC recently released its ‘Creating value beyond the deal’ M&A report – with a specific focus on value creation post deal-making.

Among the firm’s findings; many companies are overly optimistic about the value created by a deal. While 61% of buyers believed that their last acquisition created value, the study found that 53% of respondents underperformed their industry peers on average based on total shareholder return (TSR) over the 24 months following completion of their last deal. When divesting, the study also found considerable levels of underperformance, with 57% underperforming their industry peers, on average, in terms of TSR for the same period.Initial M&A strategic focus and alternative prioritiesThe report contends that one of the issues faced by many companies is their failure to make value creation a key strategic focus from day one of the process. The survey found that 34% of acquirers made value creation a priority on deal closure, with 66% stating it should have been a priority from day one. In addition, the study found that strategic vision rather than opportunism is a cornerstone for long-term value creation – demonstrated by the broader strategy brought to deals by 86 percent of those who believed the last acquisition created significant value.

Yet, while strategic decision-making is a key part of value creation, PwC furthers that any such planning necessitates deeper consideration than a simple box-ticking exercise – requiring, rather,  strategic direction. For divestment, poor performers in terms of value creation were much more likely to say that there was no blueprint for action, at 87%, compared to those whom were successful in value creation, of which 99% said there was a strategic plan in place.Retention rates for key staff in successful acquisitionsLastly, various aspects of planning require key information, such as thorough due diligence. Yet, for successful value creation, there are less tangible and measurable areas of a business that also require attention. For instance, engagement with management – a focus on aligning cultures – is believed by 89% of respondents to drive more value. Furthermore, for acquisitions, considerable focus on key employees at the acquired company remains key to retaining value.

Here, 82% of companies that said significant value was destroyed lost more than 10% of key employees post-deal, while 50% of those citing significant value creation lost fewer than 5%. On the flip-side, no company which claimed significant value creation lost greater than 20% of its key retention targets – yet this occurred in 42 percent of cases of poor value creation. Indeed, it also happened for poor performers when just 11-20% of its desired employees departed.

“Deals that deliver value don’t happen by accident,” concludes seasoned M&A and divestiture specialist Bob Saada, current Deals Leader for PwC in the US. “Transactions should be an extension of your corporate strategy instead of a sudden opportunity. Companies that invest time in strategy, follow that course, and avoid chasing a shiny object just because it’s available will have a much better path to success.”