Investors Acquire UK's North Star for Opportunities in Offshore Wind
Seeking to invest in the emerging opportunities in the offshore wind energy sector, Swiss-based private markets firm Partners Group has agreed to buy the UK firm North Star that has been building its operations to support offshore wind maintenance services. The new investors represented by Partner Group aim to transform North Star into a leading next-generation offshore wind infrastructure services company.
Headquartered in Aberdeen, Scotland, North Star is an established infrastructure company with a fleet of 48 Emergency Response and Rescue Vessels (ERRVs) and Service Operation Vessels (SOVs) and around 1,400 employees. North Star's ERRV fleet is the largest in Europe. The company has a long heritage in providing essential crew rescue, firefighting, and other emergency response services to offshore energy operations in the North Sea.
North Star had been acquired four years ago by a U.K.-based investment firm, Basalt Infrastructure Partners and a year later launched its renewable business seeking to position as Britain began its push into renewable energy. The company already reports that it owns and operates the largest wholly UK-owned fleet engaged in the U.K.’s offshore industry in the North Sea and in April 2021 placed an order with VARD for three new SOV as part of its contract to be the exclusive service vessel operator for Dogger Bank, the world’s largest wind farm.
"North Star represents an excellent opportunity to acquire a leading energy infrastructure services business that is well-positioned to capitalize on the transformative trends driving growth in the offshore wind industry,” said David Daum, Managing Director, Private Infrastructure, for the Partners Group. “The Company provides mission-critical services and benefits from steady demand due to high barriers to entry and few direct competitors.”
Partners Group and the investors that it represents believe that North Star is set to benefit from rising demand for SOVs due to structural growth in the offshore wind industry, which is being driven by global decarbonization trends. In announcing the acquisition, they said they aim to transform North Star into a leading next-generation offshore wind infrastructure services company. Partners Group said it will work with management on a transformational value creation plan that will expand North Star’s platform into Europe through growing its offshore wind fleet and broadening its offshore wind offering.
The new investors were attracted to North Star which they said has strong infrastructure characteristics with an asset-heavy business model and predictable cash flows, supported by the mandatory usage of ERRVs and long-term contracts in the offshore wind sector.
Demand for SOVs is being driven by the construction of larger wind farms further from shore, which makes daily maintenance trips inefficient. North Star's home market of the U.K. is currently the largest offshore wind market globally and is expected to account for a large proportion of future offshore wind capacity. The International market for similar services is expected to grow rapidly as more countries move to develop offshore wind farms in their drive for renewable energy.