Singapore Group Cyan to Acquire MMA in Further Offshore Consolidation
In the latest example of the ongoing consolidation in the offshore service provider sector, Australian-based MMA Offshore reports its board is recommending shareholders accept a buyout proposal from Cyan Renewables, a Singapore-based company started two years ago to focus on the green transition in offshore operations. MMA reports the offer represents a strong premium after its share price rose in response to a strong business turnaround. They believe the offer also provides shareholders an opportunity to remove risks associated with operating in a cyclical industry.
Started in 1989, MMA has been a consolidator in the industry. It used acquisitions to expand its international presence as well as to enter the subsea sector. Recently, in 2021 it expanded into Taiwan with an acquisition, and in 2022 grew in subsea with another acquisition. The company currently has 20 vessels in service.
The offer values MMA equity at approximately A$1 billion (US$673.5 million). That represents a better than 30 percent premium to the 90-day average for the company’s share price. It is 11 percent above the closing price last week.
“There has been increased interest in MMA as our strategy to diversify our operations and deleverage the business, together with our improved earnings, has seen the share price rise more than 80% over the past 5 months,” said MMA Chairman Ian Macliver. “We believe Cyan’s offer provides compelling value for MMA today,” he said while reporting the board believes the offer is in the best interests of shareholders.
It intends to retain MMA’s workforce and to utilize and grow MMA’s expertise, assets, and operating model to expand further into offshore wind support services. At the same time, Cyan said they will continue to provide a comprehensive suite of marine and subsea services to its existing clients in the offshore energy and wider maritime industries.
Cyan Renewables was launched in September 2022 by Singapore-based infrastructure fund manager Seraya Partners as the third element in a portfolio focusing on energy transition investments. At the time, they said Cyan would focus on the offshore wind sector to become Asia’s first pure play wind service company. The company’s strategy is to own, operate, and lease vessels across the offshore wind farm value chain including Crew Transfer Vessel (CTV), Service Operation Vessel (SOV), and Wind Turbine Installation Vessel (WTIV).
Last year, Cyan acquired Groenewind, a service operations vessel (SOV) from Belgium’s DEME Group while reporting it plans to operate a $1 billion fleet over the next three years in Asia and Europe. At the beginning of this year, Cyan announced it had acquired a 75 percent stake in UK-based maritime environmental response vessel operator Sentinel Marine, which has a fleet of 13 vessels. They also ordered a hybrid power Service Operation Vessel to be build by Vard and entered into a long term contract with Siemens Gamesa’s service operations at Hai Long, in Taiwan.
The acquisition of MMA requires a shareholder vote with the company reporting it expects to begin regulatory review by late May and submit it to a vote between late June and mid-July. They expect to complete the transaction by late July.