US investment firm Apollo is poised to acquire OEG Energy Group, a UK-based energy services company, at a valuation exceeding $1 billion. This move comes as investors anticipate a growing need for electricity driven by data centers and artificial intelligence (AI).
Apollo will take a majority stake in OEG, which specializes in providing services to the offshore oil, gas, and wind industries. Current stakeholder Oaktree Capital Management will keep a minority share in the business, according to sources close to the deal.
Founded in 1973 and headquartered in Aberdeen, OEG has expanded its reach through several acquisitions and now employs over 1,300 people across 65 nations. In 2023, Oaktree collaborated with OEG’s management to purchase the company.
The rush into the energy sector is fueled by increasing electricity demand from data centers and AI. For instance, in February, Brookfield Asset Management announced its purchase of National Grid’s onshore renewables business in the US for $1.7 billion, aiming to develop 10.5 gigawatts of green energy capacity in partnership with Microsoft by 2024.
Apollo has invested around $58 billion in climate and energy transition initiatives over the last five years. In December, it acquired half of a Texas-based solar and battery project from TotalEnergies and manages approximately $751 billion in total assets.
OEG operates one of the largest fleets of cargo units designed for the offshore energy sector. Its most recent financial statements indicated revenues of $320.6 million, with a pre-tax loss of $15 million for the period spanning March to December 2023. Looking ahead, OEG expects revenues to surpass $500 million in 2024, with around 55% projected to come from renewable sources.
The company aims to reach $1 billion in annual revenues by the end of the decade, aligning itself with global efforts to decarbonize electricity systems through the expansion of offshore wind energy. OEG’s CEO, John Heiton, expressed optimism for the future, stating, “This is a positive outcome that brings in a new majority owner with a shared vision of growth through the energy transition.”
Both Oaktree and Apollo have opted not to comment further on the transaction.