Background and Challenge
A major investment bank was seeking to provide finance for a new participant entering into the ERRV (emergency rescue and response vessel) market within the UK North Sea. The market entrant had developed a business plan and was confident of successful entry, considering past relationships with key clients and expectation of continued demand.
Approach and Recommendations
DW were commissioned to provide market due diligence from demand and supply perspectives to determine the reception of a new participant, to assess the existing fleet and to understand the key buying patterns of potential future customers.
- Detailed interviews conducted with major E&P companies, both IOCs and independents, operating in the North Sea.
- Supply-side fleet analysis of ERRV units and relative specification comparison to proposed fleet.
- Bespoke market modelling to gauge the “size of the prize” in the North Sea.
- Assessment of buying patterns, contracting and supply chain.
- Conclusions and recommendations to bank regarding investment.
Result
Our due diligence confirmed the market opportunity and the positive positioning of the company as a future market participant which led to subsequent investment and the establishment of a successful new entrant building significant equity value for the PE house.