Private equity firm Clayton Dubilier & Rice is investing up to $600 million in energy-services company CHC Group Ltd. (NYSE: HELI).

CHC, headquartered in Vancouver, Canada, provides offshore flying services to the oil and gas industry. The company operates a fleet of commercial helicopters that fly from about 70 bases on six continents. The company also flies search-and-rescue and emergency-medical missions for oil and gas companies, government agencies and other groups.

CD&R is investing $500 million through the purchase of convertible preferred shares that will be issued in a private placement. As part of the deal, the firm is planning to pursue a $100 million rights offering of the convertible preferred shares to existing shareholders, bringing the total amount of CD&R's investment to a potential $600 million. The deal will give CD&R about 45 percent of CHC.

The company is also part-owned by First Reserve Corp., a Greenwich, Connecticut-based private equity firm that focuses on energy-related investments. First Reserve won Mergers & Acquisitions M&A Mid-Market Private Equity Firm of the Year Award in 2012. 

The investment allows CHC to reduce leverage and improve cash flow. The company plans to use part of the proceeds to redeem $105 million in senior unsecured notes and $130 million in senior secured notes.

New York-based CD&R's recent transactions include a $910 million deal for Healogics Holding May, and a $1.7 billion deal for packaging group Mauser, also in May. 

The firm owns David's BridalJohn Deere Landscapes and Brand Energy & Infrastructure Services.

Morgan Stanley acted as CHC's placement agent for the transaction, while Evercore Partners provided financial advice. Simpson Thacher & Bartlett LLP was CHC's legal counsel. Debevoise & Plimpton LLP provided legal advice to CD&R on the deal.

Companies have been looking to invest in oil and gas services companies as the oil industry remains hot. Recent transactions include Aqua Terra Water Management LP's acquisition of two saltwater disposal facilities in the U.S., and Kleinfelder Inc.'s deal for Hood Engineering & Technical Services

For more on the trend, see "3Qs with … Craig Jarchow, Managing Director, Pine Brook Partners."

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