More optimism in sector

Diversification driving more M&A activity across energy sector

Offshore wind

Renewables are benefiting from innovation

M&A activity has picked up in the energy sector, driven by innovation and greater diversification, according to new data.

KPMG’s energy team in Aberdeen, has detected a pick up in deal flow amid greater optimism about mid to long-term prospects.

In recent weeks, the firm has advised on a number of energy deals, including the sale of Signum Technology to Trelleborg and GEV Group to Bridges Fund Management. It says the positive sentiment is welcome news for the industry as the supply chain continues to rebuild, following a sustained downturn.

The technology, skills and capabilities developed for the upstream oil and gas sector have significant value across a number of energy markets such as renewables and LNG, it says.

Robert Logue, head of energy services M&A at KPMG, said: “We’ve definitely witnessed an upward shift in momentum recently, with much of that activity driven by a desire to diversify, and the use of new technology/products to access new markets.

“Some established players are diversifying from the upstream oil and gas market, and moving towards renewables, while other new entrants are arriving, with a bigger focus on technology and innovation to drive down costs.

“What is clear is that we’re still in a period of uncertainty with the current oil price environment and the current political and macro-economic climate.

“However, we have seen positive signs that the market is demonstrating a real sense of resilience and a determination to shape a new sustainable, long term future with companies who have a technically differentiated product or service seeing growth prospects across a number of energy end markets.”

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