In a move aimed at strengthening its presence in the subsea services market, Freemantle-based OSV owner MMA Offshore Limited will acquire the operating units of ASX-listed Neptune Marine Services in a transaction valued at about A$18.5M (US$13M)
Shareholders of Neptune Marine Services (NMS) will receive A$5.0M (US$3.5M) in cash and MMA Offshore shares worth A$13.5M (US$9.5M) or as high as A$16.2M (US$11.3M), depending on the share price at the time the transaction is approved.
The deal must be approved by shareholders of NMS and Singapore-based MTQ Corp Limited, parent of Blossomvale Investments Pte Ltd, which has the controlling stake in NMS. NMS shareholders will take up approval at a meeting in October and MTQ Corp shareholders in September. If approved, the acquisition is expected to be completed by November.
Both NMS and MMA Offshore have struggled during the prolonged offshore oil and gas downturn, but the combined businesses expect to benefit from a recovering offshore and subsea market.
MMA Offshore managing director Jeffrey Weber called the acquisition “an important step” in expanding the company’s subsea service offering to existing and new clients. “Combining MMA’s vessel assets with NMS’s subsea equipment and technical expertise will result in a stronger service offering to both MMA’s and NMS’s existing clients and provide an opportunity for MMA to capture a greater proportion of the value chain”, said Mr Weber. Added Mr Weber, “The acquisition is expected to enhance MMA’s return on assets through packaging value-adding services to our vessels”.
The merged companies will have a strong presence in southeast Asia and Australia, with offices and facilities in Malaysia, Singapore, Batam and Indonesia and headquarters in Freemantle and Perth, and additional offices in Darwin and Melbourne.
By packaging back-deck work such as ROV and diving services with its fleet of multi-purpose support vessels, MMA Offshore expects to realise improved return on assets. MMA Offshore owns and operates a fleet of over 30 specialised OSVs, offering offtake, drilling, construction, seismic and survey support, and anchor handling and towing, accommodation and walk-to-work services.
Headquartered in Perth, Western Australia, NMS services predominantly Tier 1 oil and gas, and marine infrastructure clients through its operational centres in Australia, southeast Asia and the UK. NMS generated revenue of A$84M (US$59M) and cash flow of A$0.4M (US$0.3M) for FY2019 ended 31 March 2019, as compared with revenue of A$68M (US$47M) and a loss of A$7.9M (US$5.5M) for the prior financial year.
Restructuring in the OSV market will be one of the key topics at the Asia Offshore Support Journal Conference, 17-18 September 2019 in Singapore. MMA Offshore commercial director Tom Fairclough will be part of a panel discussion examining current utilisation rates, charter rate trends, reactivation of laid-up assets and market oversupply.