Synergy Capital (Synergy) is pleased to announce the exit of its investment in Ridge Energy Limited Ghana, a mid stream oil & gas infrastructure business located in Tema, Ghana. The transaction, which, closed on Thursday, August 28, 2014, is a trade sale to a major oil and gas multinational firm entering into West Africa.
Ridge Energy was exited in just over two years post –investment at a multiple of over 3X and an IRR of 84%, validating the Manager’s investment thesis anchored on the principles outlined below:
- Backing businesses and sectors with strong fundamentals – our thesis on Ridge Energy was premised on strong medium-to-long term growth prospects of Ghana’s mid stream oil & gas sector and our belief that it would outperform the underlying economy. Moreover, the industry has dollarized revenues, mitigating the foreign exchange risk.
- Backing an experienced management team – the Managing Director of Ridge was a former CEO of the Ghanaian subsidiary of a major multinational oil and gas company who had strong experience and connections in the industry
- Active management approach – Synergy deployed an active management approach to managing the investment from conception to exit, including:
- Engaging a highly experienced local construction firm and equipment suppliers for the expansion initiatives of Ridge Energy
- Implementing strong project management oversight and partnering with management to build world class systems and processes
- Managing the exit process including valuation analysis and negotiation with the acquirer to obtain an attractive price for the business.
« Back to Member News
We are encouraged by the exit of the Ridge Energy investment and believe it further goes to validate our belief that “the best way to assure a profitable exit for an investment is to build a very good business”.
Source: Synergy Capital Managers.