Assystem Puts an End to its Oil & Gas Debacle
MPH Has Been an Eleven-Year Debacle for Assystem
Assystem has put an end to its oil & gas debacle with the sale of 51% of MPH to its management.
The company acquired MPH in 2011 to expand its nuclear engineering capabilities to oil & gas. Its ambition was to turn MPH, a staffing agency primarily operating in the Gulf Countries with its headquarters in the UAE, into an engineering business. Its largest client was Total Energies. Back in 2011, we worried about Assystem buying a low-margin staffing agency.
Assystem’s ambitions never materialized. Soon after the acquisition, the oil & gas industry entered a cycle of underinvestment in its engineering capabilities. Despite times of high oil prices, the sector never resumed its spending. Prices were down. MPH expanded its client base from oil & gas to other industries. However, its revenue decreased from EUR 90m in 2010 to roughly ~EUR 30m. Indeed, Assystem had a debacle with MPH, with revenues divided by three in ten years.
Assystem started the MBO negotiations one year ago. In the wake of the Russian invasion of Ukraine, MPH had to terminate its activities in Russia, it decided to accelerate its 51% stake divestment. The divestment comes at a cost of EUR 4m for Assystem. Assystem keeps a 49% stake in MPH to secure its staffing needs, primarily in Saudi Arabia. We would have preferred Assystem to move out entirely out of MPH. However, Assystem could not sell the entire business without incurring a significant loss on its investment.