Target Information

OEG Energy Group ("OEG"), a prominent offshore energy solutions provider, has been instrumental in the energy sector for over five decades. The company specializes in delivering development and operational services to oil & gas (O&G) and wind markets, possessing one of the world's largest fleets of cargo carrying units (CCUs) with more than 75,000 units. This extensive fleet enables OEG to efficiently transport vital cargo to and from offshore energy facilities. Additionally, OEG's Renewables segment offers integrated technical solutions and services, focusing on the burgeoning offshore wind sector.

Industry Overview

The offshore energy industry is experiencing a rapid transformation as global energy demands evolve and the transition towards renewable energy accelerates. Companies like OEG are key players in this landscape, providing essential services that support both traditional fossil fuel operations and emerging renewable energy projects. With governments and private entities increasingly investing in sustainable practices and technologies, the offshore energy sector is poised for significant growth.

In the UK, where OEG is headquartered in Aberdeen, the demand for offshore energy solutions is robust. The UK's commitment to achieving net-zero carbon emissions by 2050 is driving investment in renewable resources, making offshore wind a priority. This transition presents providers like OEG with opportunities that align with their expertise and offerings.

The offshore energy market also benefits from a shift towards more efficient energy production methods. As global supply chains stabilize and advance, the demand for infrastructure and logistical support in offshore operations is anticipated to surge. Companies with established track records and assets such as OEG are positioned to capture a share of this growing market.

These trends in the offshore energy industry suggest a favorable outlook, with increasing governmental support and funding likely to bolster private sector innovation and investment. OEG stands to benefit greatly from this supportive environment as it continues to expand its operational capabilities.

The Rationale Behind the Deal

Apollo's acquisition of a majority stake in OEG Energy Group marks a strategic investment aimed at leveraging OEG’s established presence in the offshore energy market and its integrated business model. This transaction signifies confidence in OEG's capacity to sustainably grow by tapping into secular trends favoring energy transition and efficiency.

Given Apollo's extensive investment portfolio focused on climate and energy transition, acquiring OEG allows the firm to align its resources and expertise with a company that is already a leader in providing essential services for the evolving energy landscape. The partnership is expected to enhance OEG's capabilities and facilitate further innovations in service delivery.

Investor Information

Apollo Global Management, Inc. is a prominent alternative asset manager focused on generating attractive returns through its diverse investment strategies. With approximately $751 billion in assets under management as of December 31, 2024, Apollo excels in identifying undervalued investment opportunities across various sectors, including climate-focused projects and renewable energy infrastructure.

With a history spanning over three decades, Apollo has built a reputation on its disciplined investment approach, combining deep industry expertise with a commitment to sustainability. The firm has made substantial commitments towards climate and energy transition initiatives, positioning itself as a leader in supporting the shift towards sustainable energy sources.

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The acquisition of OEG Energy Group by Apollo represents a strategic move that could yield significant benefits for both parties. OEG is already well-positioned within the offshore energy sector, with established operations and a strong track record. This foundation will serve as a launching pad for growth, especially as energy production shifts towards more sustainable methods.

From an investment perspective, Apollo's expertise in the energy sector, combined with OEG's robust operational capabilities, suggests a promising potential for value creation. The integrated service offerings and the strategic focus on renewable energy align well with global trends, which could lead to increased demand for OEG's services.

Moreover, the ongoing commitment from Oaktree Capital Management, which retains a minority stake, indicates continued confidence in OEG’s growth trajectory. This type of strategic partnership often results in enhanced operational efficiency, innovation, and improved market positioning.

Overall, the deal holds strong potential as an investment opportunity. By leveraging mutual strengths and capitalizing on emerging market trends, Apollo and OEG can forge a successful path in navigating the ongoing evolution of the global energy landscape.

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