Carlyle Group set to acquire up to 40 percent stake in Cepsa

June 2019 | DEALFRONT | PRIVATE EQUITY & VENTURE CAPITAL

Financier Worldwide Magazine

June 2019 Issue

In a transaction which marks the conclusion of a proactive dual-track process to bring in new partners, private equity firm The Carlyle Group is set to acquire a minority shareholding in oil and gas company Cepsa from Mubadala Investment Company.

With Carlyle’s stake in Cepsa – a company it values at $12bn – between 30 and 40 percent, the Washington DC-based firm’s stake could be worth up to $4.8bn. While Abu Dhabi-based Mubadala will remain majority shareholder in Cepsa following completion of the transaction, its final shareholding, as well as Carlyle’s, will be confirmed upon completion of the transaction.

Headquartered in Madrid, Spain, Cepsa is Europe’s largest privately-owned integrated oil & gas company, having evolved through a combination of organic growth and strategic acquisitions. The company operates assets across the full petroleum value chain, in more than 20 countries, delivering through-the-cycle earnings resilience. It also operates in the renewables sector.

“We are delighted to partner with Mubadala and Cepsa’s management team to invest in Cepsa, which offers such strong potential and future opportunities in the global energy sector,” said Marcel Van Poecke, head of Carlyle International Energy Partners. “We look forward to building upon Cepsa’s growth path for the benefit of their customers, suppliers and employees. Our team has an established track record with a combination of energy sector, financial and operational capabilities as well as experience across the energy value chain from upstream through downstream, refining and marketing.”

This experience includes Carlyle’s construction of a broad-based global energy, natural resources and infrastructure platform – currently with $27bn in assets under management and 95 active portfolio companies – consisting of International Energy, North American Energy, North American Power and Global Infrastructure.

Equity for the transaction will come from the funds Carlyle International Energy Partners I & II, Carlyle Partners VII, Carlyle Europe Partners V, as well as co-investors.

“We are pleased to have reached agreement with Carlyle and to have them partner with us as shareholders in Cepsa,” said Musabbeh Al Kaabi, chief executive, petroleum & petrochemicals at Mubadala. “Carlyle is an established, respected and experienced investor with significant assets under management in the global energy sector. This represents an important milestone in Cepsa’s 90-year history. Mubadala has worked closely over the years with Cepsa’s management team to build a world-class fully integrated energy company.

“We now look forward to working in partnership with Carlyle which has a significant track record and energy sector capabilities, and with Cepsa’s management to further enhance and grow the business,” he continues. “We share a common view about the strength and potential of Cepsa’s business and are confident in the company’s ability to continue its excellent operational and financial performance, which was reflected in the valuation we maintained throughout the process.”

Actively managing a $225bn worldwide portfolio – which spans five continents with interests that, in addition to oil and gas, include aerospace, ICT, semiconductors, metals and mining, petrochemicals, utilities, healthcare, real estate, defence services, pharmaceuticals and medical technology and agribusiness – Mubadala Investment Company supports the vision of a globally integrated and diversified economy, through sustainable returns to its shareholder, the government of Abu Dhabi.

The transaction is expected to complete by the end of 2019, subject to regulatory approvals.

Fraser Tennant