Neptune Marine to Acquire Sea-Struct
Neptune Marine Services has signed a letter of intent for the proposed acquisition of Sea-Struct, a leading manufacturer and installer of specialized concrete based stabilization and protection systems for the subsea oil & gas pipelines and cables and the broader marine services market.
Neptune will pay A$17 million plus a three year earn out based on future performance. Payment will be 70 per cent cash and 30 per cent in new Neptune Shares. The business’ financial performance is strong, currently generating A$9 million in annual revenues and A$4 million in EBIT. Upon completion of the acquisition, and after the issue of new shares, Sea-Struct will be immediately EPS accretive.
Established in 1993, Sea-Struct is a specialist engineering firm that manufactures, supplies and installs pipeline and cable stabilization protection and erosion control products for the subsea oil & gas sector and the broader marine services market.
Sea-Struct provides offshore grouting equipment and personnel for free span correction works as well as the SEAMAT range of precast concrete mattresses that are used to support, protect and stabilize subsea oil & gas pipelines. The SEAMAT range of concrete stabilization products are manufactured and supplied to most countries within SE Asia.
With a team of 37 staff within the 3 offices, Sea-Struct’s Australian entity is based in Fremantle, Western Australia, and has affiliations with Sea-Struct International Pte Ltd in Singapore and PT Sea-Struct Indonesia Batam Island, Indonesia. The business also has representatives in Europe, the United States and the Middle East. Customers include major energy producers, EPCM firms and government authorities.
Neptune’s Managing Director and CEO Christian Lange said Sea-Struct is complementary to Neptune’s existing operations and fits well with the group’s integrated engineering services and solutions strategy.
"Sea-Struct is an excellent business and represents another growth channel for Neptune. The business’ products are highly regarded in the subsea oil & gas sector and they are complementary with Neptune’s existing subsea pipeline engineering and maintenance services.
"Some of Neptune’s operating businesses have worked with Sea-Struct for many years, so we know the business and the team very well. We are delighted that Sea-Struct’s founder and Managing Director David Maclean will stay with the business for a minimum of three years and continue to drive its growth.
"Sea-Struct also gives Neptune the platform to expand its international operations in the immediate future. The business’ presence in Singapore and Indonesia means we can very quickly offer Sea-Struct's customers complementary subsea engineering and maintenance services in these markets. This represents a good organic growth opportunity and a platform to establish Neptune in the broader Asian oil & gas market.
"Neptune is off to a strong start in FY2008. Our new businesses have come together well, and we are taking advantage of the integrated opportunities that have arisen as a result of our expanded business model. Across all divisions, we are winning new work and growing our operations. The Sea-Struct acquisition represents another outstanding addition to Neptune’s service and solutions capability, and will improve our geographical footprint. Neptune continues to assess additional growth opportunities in the global subsea oil & gas sector," Mr. Lange said.
Neptune expects to complete the acquisition of Sea-Struct in early Q3, FY 2008.
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Company: Sea-Struct more info
- Neptune Marine to Acquire Sea-Struct (Oct 01)