Richard Ong’s fund teams with Temasek in US oil firm acquisition

This is the first investment made from Ong's maiden fund, called RRJ Capital, and comes weeks after the vehicle was slated to complete its first close. In February, reports surfaced that RRJ aimed to hold a first close at $1.5 billion at the end of March, with its second close for the full $2 billion target is slated for early June this year. That fund was said to become one of the largest funds dedicated to Asian markets, though Frac Tech itself does not have operations outside the US.

According to a Frac Tech release, the private equity consortium received $1.7 billion worth of debt financing commitment from its financial advisors, and the deal is expected to close in the second quarter of this year. In addition to RRJ and Temasek's stake acquisition, Chesapeake Energy Corporation will also boost its holding in Frac Teck to 30% from 26%.

Frac Tech claims to be the fourth-largest provider of well stimulation services to the U.S. exploration and production industry. The company estimated that consolidated EBITDA for the fiscal year ending March 31, 2011, was approximately $685 million, which may grow to between $1.1 billion to $1.15 billion for the end of FY11.

Bank of America Merrill Lynch and Citigroup served financial advisors to RRJ, Temasek and Chesapeake.

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• Topics
• Technology
• Buyouts
• Hopu Investment Management
• Temasek Holdings