AqualisBraemar has entered into an agreement to acquire 100% of the shares in LOC Group. The company said that doing so “would create an even more complete service provider to the offshore renewables industry”
AqualisBraemar chief executive David Wells said, “Our strategy is clear. We want to grow through continued expansion in the rapidly growing offshore renewables industry, and leverage on our position within the shipping and oil and gas markets to support this energy transition.
“LOC Group, with its strong and highly complementary footprint within the same industries, is a perfect fit for this strategy.”
AqualisBraemar is an Oslo-listed group that offers consultancy services to the offshore energy industries, including renewables and oil and gas, plus shipping and insurance industries. It operates in the renewables industry through offshore wind consulting firm OWC and AqualisBraemar.
LOC Group, founded in 1979, is an international marine and engineering consulting firm that operates under four brand names: LOC, Innosea, Longitude and JLA (John LeBourhis).
In the renewables sector, LOC Group operates through Innosea, which is an independent engineering firm that specialises in the renewables sector; LOC which provide renewables marine warranty surveying; and Longitude which offers renewables engineering services particularly related to installation.
LOC Group chief executive Dr R V Ahilan said, “The consulting space in marine and offshore energy, including renewables and oil and gas, is ripe for consolidation.
"Our customers’ needs are rapidly evolving, with many branching out into new energy sources, and we believe our joint increased scale and global footprint will help us cater for those requirements.”
“Our complementary geographical footprint reiterates how this acquisition will allow us to provide clients in the renewables industry with even better local expertise and swifter response times regardless of where in the world they are,” said Mr Wells.
By joining the fast-growing specialist renewable entities of AqualisBraemar’s offshore wind consultancy firm OWC with LOC Group’s Innosea and other renewable-focused units, the combined group will double its size within renewables.
Following completion of the acquisition the combined group will have 880 employees in 85 offices in 39 countries around the world.
The two companies have complementary market positions in the renewables sector. AqualisBraemar has a strong position within providing owners engineering services and LOC Group has a strong footprint within foundation design engineering and marine warranty services. In addition, while AqualisBraemar has focused on offshore wind, Innosea brings additional wave, tidal and floating solar capabilities into the combined group.
“We are combining two well-run businesses to create an even more complete service provider. You would have to look very hard to find a better strategic fit than AqualisBraemar and LOC Group. This is a key reason for why key managers have decided to continue with the combined group,” said Mr Wells.
Dr Ahilan will continue in the joint company in a newly created role as chief energy transition officer, supporting the group’s ambition of 50% of revenues coming from renewables and other sustainability and CO2-reducing activities by 2025. He will also join the combined group’s executive management team.
“The exponential growth we are witnessing in offshore renewables requires all the specialist competence it can get. However, this is not a numbers game, it is about working smarter," Dr Ahilan said.
“Combining OWC’s leading position in renewables consulting and engineering with Innosea’s specialist competence within fixed and floating substructure concept development and turbine engineering and analysis is one way to address this requirement. In addition, we have LOC’s leading position within marine warranty services for the offshore renewables sector.
“Our objective is that 50% of our revenues should come from the renewables sector and other sustainability and CO2-reducing activities in 2025. However, reducing the carbon intensity of the offshore oil and gas and shipping industries is also key to achieving the energy transition. We will continue to support all these industries to help make this energy transition happen.”
The purchase price consists of a combination of US$20.2M net cash consideration, subject to customary adjustments prior to closing, plus conditional warrants in AqualisBraemar.
Closing of the acquisition is expected on or around 21 December 2020. The transaction is subject to approval of an equity issue by an extraordinary general meeting (EGM) at AqualisBraemar. That EGM will be held on or about 14 December 2020.
AqualisBraemar and LOC Group will be trading separately for up to six months following completion of the transaction.