Tuesday, July 7, 2015

Shipping Group Maersk Disposes of Another Non-Core Business

ESVAGT Safety at Sea Sold On for Over 600 Million Dollars
Shipping News Feature

DENMARK – Shipping conglomerate, the Maersk Group and Danish investor, ESE-Holding A/S, have announced the sale of offshore ‘safety and support at sea’ subsidiary ESVAGT for DKK 4.1 billion equating to approximately $610 million at current rates. International infrastructure investors, 3i Infrastructure and AMP Capital have entered into an agreement to jointly acquire 100% of the shares in the Esbjerg headquartered company, which hopes to expand its offerings in the offshore wind energy market.

ESVAGT has a fleet of 43 vessels with one service operating vessel (SOV) newbuilding scheduled for delivery in 2016 and one crew change vessel (CCV) newbuilding scheduled for delivery in 2017, and employs more than 800 people on- and offshore. In 2014, ESVAGT delivered a profit of DKK 252.3 million ($37.1 million) and a turnover of DKK 943.2m ($137.2 million). In a statement the company said it is in a strong position to continuously develop its wide range of specialised offshore services and grow further. Maersk Group CFO and Chairman of the Board in ESVAGT, Trond Westlie, said:

“ESVAGT is a sound, well-run company with an exceptional operational excellence, and we have assessed how we best serve ESVAGT’s long-term interest, as they are not part of the Maersk Group’s core business. The sale to 3i Infrastructure plc and AMP Capital has proven to be the best way of ensuring that ESVAGT can continue its development based on a strong culture and heritage, while at the same time creating value for the shareholders.”

ESVAGT was founded in 1981 by ESE-Holding A/S. In 1991 the Maersk Group bought 50% of the company, and in 1998 the Maersk Group’s ownership share increased to 75%. The remaining 25% has remained with ESE-Holding A/S. Kent Kirk, co-founder of ESVAGT and shareholder in ESE-Holding A/S, commented:

“ESVAGT was founded in 1981 to abate unemployment in the fishing industry. Many skilled employees, both current and former, have been employed by the company, and we are happy to have been able to offer a large number of young people a career at sea. Almost 25 years of collaboration with the Maersk Group has meant ESVAGT is now industry leader when it comes to safety at sea. We are happy that by selling to 3i Infrastructure plc and AMP Capital, we have found a shareholder group who will invest with the long-term perspective.”

The heritage of both ESE and ESVAGT can be guessed at by their quayside addresses close by each other in the old fishing port of Esbjerg and with ESVAGT’s strong market position and a long-term growth strategy, the new shareholder group aims to build on the company’s business strategy and operational talents. Ben Loomes and Phil White, Managing Partners and Co-heads, Infrastructure, 3i Investments, said in a statement:

“We are pleased to be investing in ESVAGT, a leading provider of emergency rescue and response vessel services to a diverse customer base in the offshore oil and gas industry. ESVAGT has a successful history in its core markets, Denmark and Norway. With a strong and defensible market position, the business is well placed to replicate its success in overseas markets and leverage its expertise to expand in the offshore wind sector. We look forward to working with the ESVAGT management team to build on the success of the business and deliver attractive returns to 3i Infrastructure’s shareholders.”

AMP Capital Global is an Australian based investment group which started life in 1849 as the Australian Mutual Provident Society and now has A$160 billion in funds under management. The group has a history of investment in clean energy infrastructure and Head of Infrastructure Equity, Boe Pahari commented:

“We believe ESVAGT represents an excellent opportunity for our investors. It holds leading positions in its core Scandinavian markets where there are high barriers to entry. Its contracted revenue streams, unique operating model and market-leading margins mean it is expected to continue to deliver stable and predictable revenue. The company is also well positioned to replicate its success in overseas markets as well as the offshore wind sector, which we believe offers exciting opportunities for the business.”

Completion of the transaction remains conditional upon receiving clearance from the European Commission under the EU Merger Regulation. Completion is anticipated by the end of September 2015. ESVAGT CEO Søren Nørgaard Thomsen, summed up saying:

”We are very proud of the results we have achieved under our current ownership, and with a new dedicated owner, we will be able to ensure a continued healthy development of our business, firmly anchored in our Danish heritage and operational excellence.”