EnSource is a provider of control and compression equipment to the oil and gas industry in Canada.

www.enerflex.com

Investment

C$18 million

Fund

ONCAP I

Period

January 2000 – 2003

ONCAP Team

Mark Gordon
Mark MacTavish

EnSource Energy Services image

Transaction Summary

ONCAP acquired EnSource Energy Services (“EnSource”) in partnership with RedTree Capital in January 2000.

Business Description

At the time of ONCAP's investment, based in Calgary, Alberta, EnSource was the largest integrated provider of electrical and instrumentation control technologies, custom manufactured processing equipment, and low-horsepower compression equipment in Western Canada. EnSource specialized in providing natural gas compression and power generation equipment for either sale or lease to hydrocarbon production and processing facilities, as well as electrical, instrumentation and controls services. EnSource also provided a comprehensive package of field maintenance and contracting capabilities.

Accomplishment and Outcome

EnSource was established to capitalize on the increasing demand for energy infrastructure and related services as a result of the strength and expected growth of the natural gas industry in North America. The merger of two predeccessor companies created a platform to broaden the scope of EnSource’s energy services offerings through a series of acquisitions and organic initiatives. By subsequently merging EnSource into Enerflex, ONCAP helped create a diversified oil and gas service company with annual sales in excess of $500 million. The combined company continued to have a leading presence in Canada and was well-positioned for growth in the U.S. and internationally.

In 2003, ONCAP sold its equity ownership stake in Enerflex for total realized proceeds of $37 million, which represented a 2.0x gross multiple of capital invested and a 21.8% gross IRR over the four-year investment period.