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Genstar invests in Canadian oil sands services

Oil sands-related construction services company Voice Construction has been acquired by middle market investor Genstar Capital. The 173 billion barrels of oil tucked away in Alberta’s oils sands have become increasingly lucrative as oil prices skyrocket.

Middle-market investor Genstar Capital has acquired Alberta, Canada-based Voice Construction, a provider of construction services to operators in Canada’s Alberta oil sands and surrounding areas.

Financial details were not disclosed.

Voice Construction was purchased from the Voice family, which founded the company in the 1930s. The company offers specialty services for oil sands companies in Northern Alberta including site preparation and infrastructure development. The company also services in the related petrochemical, pipeline and power industries.

Previously unprofitable to process for crude oil, the oil sands in Canada have become a lucrative sector for investment as oil prices skyrocket. The oil sands in Alberta contain 173 billion barrels of proven reserves that can be recovered using current technology, according to a 2006 report from the Alberta Department of Energy.

“Given the abundance of projects that have materialised in Alberta, and the stability of the oil sands, the resources and support that Genstar and their management bring to the Voice team could not have materialised at a more opportune time,” Voice Construction chief executive Scott Shea said in a statement.

Canada’s 180 billion of proven oil reserves, including the oil sands, account for 15 percent of world oil reserves placing Canada second only to Saudi Arabia.

Genstar has previous exposure to the industry surrounding Alberta’s oil sands by way of the firm’s 2003 investment in North American Energy Partners (NAEP). The company was acquired by an investor group made up of Genstar, The Sterling Group, Perry Strategic Capital, Stephens Group, BNP Paribas Securities and members of management for $310 million.

NAEP provides mining and site preparation, piling and pipeline installation services in western Canada.

San Francisco-based Genstar targets investments in sectors within the life science, healthcare services, industrial technology, software and business service industries. The firm closed its fifth fund on $1.6 billion in June 2007. Fund IV closed on $475 million in 2004.

Financing for the transaction was led by Canadian Imperial Bank of Commerce and HSBC Bank Canada. CIBC World Markets was financial advisor to Voice Construction.