HitecVision establishes Moreld

HitecVision announces the establishment of Moreld, a large, new industrial group based on 20 of the companies in its portfolio. While these companies currently concentrate on the oil and gas industry, Moreld will provide them with the resources needed to accelerate a development into other segments of the energy sector, including the rapidly growing renewables market. The company will have approximately 3,600 employees, and in 2019 had a combined revenue of 8.8 billion Norwegian kroner (NOK), with an EBITDA of NOK 483 million (preliminary figures). Based on the companies’ strong order backlog, further growth and strengthened profitability are expected for 2020.

Most of the oil service and oilfield technology companies in HitecVision’s portfolio are now showing good performance after a demanding turnaround period following the industry downturn, and indications are that activity levels in the oil industry will remain solid for years to come. At the same time, in the longer term the world will enter a new era where oil & gas will be less important. Many of the companies that will combine to form Moreld are already well under way in developing new offerings in renewable energy and other industries, this is however a major transition that will be particularly challenging for smaller companies. The purpose of Moreld is to provide strength and momentum in this transition process towards new business areas.

The oil and gas sector is expected to remain the most important for the company for a long time, and is expected to provide interesting new opportunities as existing customers adapt to the new energy reality. The longer trends however support sustainable projects on land and at sea; offshore wind and offshore aquaculture are among the major global growth areas where the Moreld companies have unique core competencies and experience.

Management of all 20 portfolio companies have now been given a new mandate, and are being asked to pursue entrepreneurial ideas and seize the market opportunities ahead. To increase the momentum of these processes, the companies will merge into Moreld, which will take an active role in the necessary transformation of the Norwegian oil service industry in the coming years. “The name Moreld reflects that this is a Norwegian knowledge industry related to the ocean” says HitecVision partner André Ølberg. “Moreld will build on the competencies and market positions of each company in the portfolio. Each of the companies will continue to operate under its existing name, but the size and financial robustness of the new group will put them in better position to establish new business areas, jointly or individually.”

Endre Folge, the newly appointed CFO of Moreld adds, “In today’s competitive environment, size is becoming ever more important, and in Moreld, we are creating this size. In addition to the technological know-how existing in these companies, they are also characterized by an active focus on sustainability, including operative experience in HSEQ and ESG practices that have been built up over years. These are core values that Moreld will be bringing from the oil industry, and that will prove to be a competitive advantage when the company grows into new business areas going forward.”

“Eighteen months ago, we said the time was ripe to realise many of the companies in this part of the HitecVision portfolio. However, we have experienced that the uncertainty around oil & gas has meant that the interest in offering relevant values, even for well-run and profitable suppliers, has been weaker than expected.” comments Atle Eide, Senior Partner at HitecVision “We have therefore decided to stop the sales processes, and instead plan to generate value over a much longer ownership period. We will use the knowledge base that has been built up in these companies to create growth and interesting new jobs, while at the same time meeting our obligations to the investors in our funds,” he says.

Each of the 20 companies has its own long-term sustainable growth strategy, and ESG and HSEQ will be core values for Moreld. As part of a larger group, the companies will be able to draw on larger resources and strength to execute their plans; become more attractive partners for customers, suppliers, and lenders; and become even more exciting places to work. In this context, there will be great potential in exchanging knowhow between the companies.

Examples of this include floating offshore wind, where Vryhof is already involved in mooring solutions and project management, and offshore fish farming, where Global Maritime had the responsibility for designing the world’s first offshore fish farm. Moreld will become a major international supplier where the companies together can develop and offer larger and more complete solutions than each of them would have been able to alone. The plan may also involve further acquisitions or mergers going forward.

“It is important to note that the companies in Moreld plan to retain their positions in oil & gas”. But Endre Folge, incoming CFO, is quick to emphasize that “growth in the long run will be about the transition to renewable energy resources, other sustainable use of the oceans, and making use of the companies’ broad core competencies towards other sectors.”

The management team of Moreld is being developed now. In addition to Chief Financial and Investment Officer Endre Folge, Jan Erik Rugland (Chief Operating Officer), and Andreas Marø (Director Business Development) will transfer from HitecVision. Chairman of the Board will be Ola Sætre, a founding partner at HitecVision. Atle Eide, Senior Partner at HitecVision, is the overall project manager and will fill the CEO role until a permanent CEO has been appointed, a recruitment process that Eide believes will be completed by the end of March. Moreld’s headquarters will be located in Stavanger, where many of the portfolio companies’ headquarters are also located.

Moreld is 100% owned by HitecVision funds, and will work closely with HitecVision. The transaction is expected to close in Q2 2020, subject to normal conditions and approvals.