Mermaid Marine Australia Ltd., an oil and gas marine services provider, agreed to buy all of Jaya Holdings Ltd.’s energy shipping services assets in a S$625 million ($495 million) cash deal.
Mermaid Marine will fund the acquisition, including a fleet of 27 vessels and two shipyards in Singapore and Indonesia, through a share sale and new debt, the Fremantle, Western Australia-based company said today in a statement.
Buying Singapore-based Jaya’s assets delivers “immediate scale in international markets,” Mermaid Marine’s Managing Director Jeffrey Weber said. The agreement also includes orders to build six vessels for delivery by December 2015.
The deal provides “geographic diversification for our vessel operations through the addition of a complementary vessel fleet which already has operations in markets across South East Asia and the Middle East,” Weber said in the statement.
The acquisition is subject to approval from Jaya shareholders and regulators. Mermaid Marine plans to raise A$217 million ($196 million) from a share sale to existing holders priced at A$2.40 a share and A$100 million from a sale of new shares to institutions. National Australia Bank Ltd. and Australia & New Zealand Banking Group Ltd. have provided new debt to the company.
Mermaid Marine, which halted its shares from trading today, fell 3.1 percent to A$2.81 in Sydney trading yesterday.
Jaya will consider its future options for the company once the deal is completed, it said in a separate statement. It will use the proceeds from the sale to pay a one-off dividend and a one-time incentive payment to some company executives.
Mermaid’s net income fell 26 percent to A$24.2 million in the six months to Dec. 31 compared with the same period a year ago, it said today in a separate statement. Profit declined after a number of projects started later than expected, resulting in lower supply base and vessel utilization rates, the company said.