Australia’s Mermaid Marine to Buy Jaya Offshore Business

MV Jaya Confidence. Photo (c) Jaya Offshore
MV Jaya Confidence. Photo (c) Jaya Offshore

reuters_logo1SYDNEY, Feb 25 (Reuters) – Australian marine logistics firm Mermaid Marine Australia Ltd said on Tuesday it had agreed to buy the offshore businesses of Singapore’s Jaya Holdings Ltd for A$550 million ($495.96 million) in cash to expand its international portfolio.

Mermaid Marine, a Perth-based company which provides vessel and supply base services to offshore oil and gas explorers, will expand its scale in the Southeast Asian and Middle Eastern markets through the acquisition, the company said in a statement.

The acquired businesses include 27 vessels currently operating in South East Asia, the Middle East and East and West Africa, two shipyards in Indonesia and Singapore, and a new build pipeline of six vessels for delivery by 2015.

“The acquisition provides increased geographic diversification for our vessel operations through the addition of a complementary vessel fleet which already has operations in markets across Southeast Asia and the Middle East,” Mermaid Marine managing director Jeffrey Weber said.

The deal, subject to shareholder approval and expected to be completed by April, will deliver mid-single-digit earnings growth in full-year 2014, excluding transaction expenses, Mermaid Marine said.

The deal would be funded through a A$317 million equity raising and new debt facilities from Mermaid’s existing banks.

Mermaid’s underlying net profit fell 25.5 percent from a year earlier to A$24.2 million for the six months ended December, the company said on Tuesday.

The result was in line with Mermaid’s guidance, and was attributed to lower drilling activity and delays to commencement of vessel scopes.

Mermaid expects to deliver a full-year net profit in line with the previous year, excluding the Jaya deal’s impact, and said the second half would be stronger than the first.

Shares in Mermaid Marine were on a trading halt on Tuesday. The stock has lost 30 percent over the past year, against a 7.6 rise for the broader market. ($1 = 1.1090 Australian dollars) (Reporting by Maggie Lu Yueyang; Editing by Stephen Coates)

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