International ports owner-operator acquires leading international energy and marine logistics operator
In an official press notification DP World has announced its 100% acquisition of Dubai-based oil services company Topaz Energy and Marine from the Sultanate of Oman’s Renaissance Services and Standard Chartered Private Equity / Affirma Capital for an enterprise value of US$ 1,079mn.
Topaz, a leading international critical logistics and solutions provider to the global energy industry, operates a modern, versatile fleet of 117 vessels, predominantly in the Caspian Sea, MENA, and West Africa regions.
The deal, which is subject to regulatory approvals, is expected to be completed in the second half of the year, DP World said in a statement to Nasdaq Dubai, where its shares trade.
The group enjoys a particularly strong position in its core Caspian Sea market. 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% of global oil reserves.
Outstanding contracts
Topaz also maintains long-standing relationships with many of the leading international and national oil companies, including BP, Chevron, Dragon Oil, Dubai Petroleum, ExxonMobil 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 US$ 1.6bn as of 31 March 2019, far exceeds industry benchmarks, demonstrating the success of the Company’s strategic approach. For DP World, the transaction supports its objective of increasing the company’s presence in the global logistics and marine services industry, the press communiqué continued.
“We are pleased to announce the acquisition of Topaz, which further strengthens 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. This latest acquisition complements the operations of our P&O Maritime Services (POMS) business, which maintains over 300 vessels globally,” affirmed Sultan Ahmed Bin Sulayem, Group Chairman and CEO, DP World.
Business expansion prospects
“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. Furthermore, this new partnership opens the door for DP World to explore new business areas more extensively, for example, increasing transit volumes through Azerbaijan within the East-West trade corridor,” he continued.
“This transaction is in line with our strategy to grow our presence in marine logistics and become a solutions provider to end customers. We look forward to welcoming the Topaz team into the DP World family,” he concluded.
A leading enabler of global trade, DP World’s current portfolio of 78 operating marine and inland terminals is supported by more than 50 related businesses in over 40 countries across six continents, with a significant presence in both high growth and mature markets.
Container handling is the company’s core business and generates more than 50% of its revenue. In 2018, DP World handled 71.4mn TEUs (twenty-foot equivalent units) across its portfolio. With its committed pipeline of developments and expansions, the current gross capacity of 91.2mn TEUs is expected to rise in line with market demand.
