London-based Virgin Green Fund and Abu Dhabi-based Masdar Clean Tech Fund have acquired DuraTherm, a Texan petroleum and metal-recycling business for an undisclosed sum.

The transaction will make the two funds equal equity partners and was structured as an asset acquisition supported by loans from HSH Nordbank, according to the buyers.

The funds are betting on a tightening of environmental regulations surrounding the handling of petroleum waste, where DuraTherm’s technologies, such as its desorption process, play a role in removing petroleum fractions absorbed into surfaces by liquefying or gasifying them.

The company treats waste streams at its plant or at customers’ sites, including oil-contaminated drill cuttings, refinery wastes, petrochemical wastes, hydrocarbon-contaminated soils, spent catalysts and other petroleum-compatible residuals.

The capital provided by Virgin Green and Masdar will be used to expand on mobile units, enlarging Dura-Therm’s customer base in the US and abroad.

The funds have poached Kevin Trant from Siemens Water Technologies to be DuraTherm’s new chief executive. At Siemens, Trant focused on municipal and industrial customers. DuraTherm’s founder and former chief executive, Barry Hogan, will be retained as an advisor.

Masdar Clean Tech Fund is a $250m (£125m) diversified venture capital investment vehicle comprising capital from Abu Dhabi Future Energy Company, Consensus Business Group, Credit Suisse and Siemens AG. It focuses on investments that are realisable in the United Arab Emirates.

Virgin Green Fund was established to invest in companies in the renewable energy and resource efficiency sectors in the US and Europe.