Salans has represented the founders of Novomet, one of Russia’s largest electrical submersible pump manufacturers, in the sale of shares to a syndicate of three investors, namely, Baring Vostok Capital Partners, Russia Partners (both leading private equity sponsors investing in the CIS) and RUSNANO (Russian Corporation of Nanotechnologies).
Novomet, established in 1991, is a dynamic, innovative enterprise producing advanced equipment for mechanised oil extraction, as well as providing servicing with its strategy focusing on the design and serial manufacture of equipment for difficult operating conditions. Part of the sale proceeds will be used to expand production of high-efficiency oil extraction equipment. The project will have three focuses: innovation, reconstruction and modernisation of facilities and service, involving the establishment of service centres. The transaction is expected to strengthen Novomet’s presence on foreign oil services markets. Service centres have already been opened in 10 countries including in the Middle East, South America, North Africa and the Pacific region. The company plans to open centres in a further ten countries.
Salans has advised the founders of Novomet on all aspects of the transaction.
Salans’ team of lawyers was lead by Moscow M&A and Private Equity Partner Alexei Zakharko, assisted by Moscow Senior Associate Nadezhda Gryazeva, London Partner Paul Salmon and Moscow Associates Vladislav Bromberg and Sergey Shishkin.
Alexei Zakharko commented: “This is definitely the private equity deal of the year on the Russian market for a number of reasons. Both the target and the investors are unique. Novomet is a genuine success story of a Russian manufacturing business founded by scientists becoming international. Baring Vostok, Russia Partners and RUSNANO are major players on the market and we have not seen many examples before of private equity co-investment transactions of this size. The two-tier investment structure and the number of investors have resulted in very complicated legal arrangements. This transaction has once again demonstrated our ability to act on complicated private equity transactions and our leading positions among legal advisors.”
RUSNANO (Russian Corporation of Nanotechnologies) is a joint-stock company created and owned by the Russian government and aimed at commercialising developments in nanotechnology, typically acting as co-investor in nanotechnology projects with significant economic and social potential.
Baring Vostok specialises in investments in Russia and other CIS countries. Baring Vostok’s long-term investors are US, West European and Asian pension and university funds. Since 1994, Baring Vostok funds have invested more than USD 1.6 billion in 56 projects, including a number of successful companies in financial services and the oil and gas industry, telecommunications and media, and the consumer sector. The funds currently have USD 2.2 billion in attracted capital. Baring Vostok has been recognised by readers of Private Equity Online and Private Equity International as “Russian Private Equity Firm of the Year” each year from 2005 through 2010.
Russia Partners is a pioneer in private equity in Russia and the CIS and has more than USD 1 billion in investments under management. Since its establishment in 1991, the fund has managed more than 60 investments in Russia and the CIS. Russia Partners is the Russian affiliate of Siguler Guff & Company, a global private equity fund with more than USD 10 billion in assets and its headquarters in New York.
