DUBAI: DP World PLC announced the acquisition of 100 percent of Topaz Energy and Marine Limited from Renaissance Services SAOG and Standard Chartered Private Equity / Affirma Capital (SCPEL) for an enterprise value of $1.079 billion.
Topaz is a leading international provider of critical marine logistics and solutions to the global energy industry. The Company operates a modern and versatile fleet of 117 vessels, predominantly in the Caspian Sea, MENA, and West Africa regions. The group enjoys a particularly strong position in the Caspian Sea.
The Caspian Sea is the largest inland body of water in the world, and one of the most strategic oil basins. Long-term contracts and high barriers to entry characterise the basin, which holds approximately 6 per cent of global oil reserves. Topaz also maintains long-standing relationships with many of the leading international and national oil companies, including BP, Chevron, Dragon Oil, Dubai Petroleum, ExxonMobil, Saudi Aramco and Tengizchevroil.
Topaz’s enduring focus on securing long term strategic contracts has allowed it to outperform the market, and the Company’s market-leading contract backlog of $1.6 billion as of 31 March 2019, far exceeds industry benchmarks, demonstrating the success of the Company’s strategic approach. For DP World, the transaction supports our objective of increasing the company’s presence in the global logistics and maritime services industry.
Topaz reported consolidated FY2018 revenues of $349 million and EBITDA of $190 million. The acquisition is expected to be earnings and margins accretive from the first full year of consolidation and is expected to meet DP World’s return targets. On a proforma basis, DP World’s net leverage as of FY2018 would be 3.0x Net Debt to EBITDA with this acquisition, compared to the reported 2.8x.
The transaction is subject to customary completion conditions and regulatory approvals and is expected to close in the second half of 2019.
Sultan Ahmed Bin Sulayem, Group Chairman and CEO, DP World, said: “We are pleased to announce the acquisition of Topaz, further strengthening DP World’s position as a world-leading operator in maritime logistics services. In recent years, we have been investing selectively in the marine logistics sector in companies with high revenue visibility, consistent track record and strong customer relationships, and this acquisition complements the operations of our P&O Maritime Services (POMS), which maintains over 300 vessels globally. Much like DP World, Topaz has evolved its business, offering customers a range of logistics solutions and helping the Company outperform the industry. We believe that this innovative approach, together with the increased scale, will allow the combined Topaz and P&O Maritime Services business to drive efficiencies and earnings growth, and we look forward to welcoming the Topaz team into the DP World family”.
This transaction is in line with our strategy to grow our presence in marine logistics and become a solutions provider to end customers. Importantly, we expect the acquisition to accelerate returns and drive value for all stakeholders.”