Blackstone’s Purchase of Enverus a Wager that Data will Drive New Era in Energy, CEO Says

US$6 billion-plus deal for Calgary-based energy software firm may be the largest Canadian-linked tech deal in 25 years

Enverus CEO Manuj Nikhanj is accustomed to his company flying under the radar — including the news last week that it had reached a reported US$6 billion-plus deal to be acquired by private equity giant Blackstone Inc.

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Manuj Nikhanj is clearly still digesting the fact that last week, amid headlines heralding Shopify Inc.’s soaring market cap and news of a potential rescuer emerging for bankrupt battery startup Northvolt AB, one of the largest Canadian-linked tech deals in a quarter century slipped by with much less notice.

The Calgary-based chief executive of energy-focused data and software provider Enverus Inc. is accustomed to his company flying under the radar — including the news last week that it had reached a reported US$6 billion-plus deal to be acquired by private equity giant Blackstone Inc.

“This would be the largest software transaction in Canada’s history, I would think, and this is the biggest ever in the history of energy software,” Nikhanj said Wednesday from his office in Calgary. “But very few people know what we do. It’s a little bit shocking.”

The news did make waves in some energy and tech circles where Enverus is known for its transformation from Drillinginfo — an online database of oil and gas drilling permits and production data — to a data provider for the broader energy sector, with real-time data on power grid conditions and drilling rig activity, serving roughly 8,000 customers in oil and gas, renewables, power markets and finance.

The move comes on the heels of a string of acquisitions by Blackstone that suggest the world’s largest alternative asset manager is betting on a looming surge in power demand, including purchases earlier this year of power plants and utilities in Texas, New Mexico and Pennsylvania.

And industry watchers have pointed to Blackstone’s purchase as proof of the market’s growing appetite for data that could enable big tech firms to speed up building data centres and artificial intelligence-related power infrastructure. Nikhanj shares this view, pointing to estimates of energy consumption increasing by 30 per cent to 50 per cent by 2050.

“The big task ahead of us is to help the industry be able to supply what’s actually needed based on the tsunami that’s coming around demand for all sorts of energy,” Nikhanj said.

“We believe the world is going to change with generative AI and are big believers that those that have the most data and proprietary data will be the leaders.”

Already the largest energy-focused software-as-a-service player in the market, the company is aiming to use the boost in capital from Blackstone’s acquisition to accelerate expansion of its existing AI capabilities.

The company is also hoping to use its deep domain expertise to relieve the problem of a backlog of power generation and storage projects that are seeking access to electrical grids in jurisdictions across North America.

“The question is how the heck are we going to be able to supply that much energy … to meet the rising demands that are coming,” Nikhanj said. “You’ve got old grids, you’ve got backed up queues in order to get new power projects onto the grid and then you’ve got this massive demand being spiked out by things like data centres and AI.”

Two years ago, the company’s customers in power and renewables were almost entirely power generators or traders — but that has been changing fast as large power consumers, including major cloud and data hyperscalers, data centres and crypto mining developers have come knocking.

“You can’t get on a single conference call by one of the hyperscalers or Microsoft (Corp.), or any of these companies, without them talking about power and the need for power,” he said, referring to the megacap U.S. tech firms investing massive amounts into artificial intelligence.

Along the way, the company has also been criticized for pricing too rich for the energy sector’s smaller producers and enterprises, though Enverus estimates that 98 per cent of U.S. oil and gas producers and nearly every Calgary-headquartered Canadian energy company is a customer.

Nikhanj said Enverus has been able to “democratize” access to data that was previously fragmented across different sectors, governments, regulatory agencies and legal jurisdictions, increasing market transparency and efficiency for one of the most capital intensive industries in the world.

“The world is changing big time, and the world of energy is going to change big time, (including) how companies operate, and those that lean in to the technology will be the ones that are standing at the end of the day,” Nikhanj said.