DP World splashes over $1 billion on Topaz acquisition

Dubai-based port operator DP World has acquired a 100 percent of Topaz Energy and Marine, a provider of marine and logistics solutions to the offshore industry, for an enterprise value of $1.079 billion.

One of Topaz’s vessel. Source: Topaz

DP World bought Topaz from Renaissance Services SAOG and Standard Chartered Private Equity / Affirma Capital (SCPEL). DP World operates multiple yet related businesses – from marine and inland terminals, maritime services, logistics and ancillary services, to technology-driven trade solutions.

Topaz operates a 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, one of the most strategic oil basins. Long-term contracts and high barriers to entry characterize the basin, which holds approximately 6 percent of global oil reserves, according to DP World.

As of March 31, 2019, Topaz had a contract backlog of $1.6 billion.

“For DP World, the transaction supports our objective of increasing the company’s presence in the global logistics and maritime services industry,” DP World said in a statement on Monday.

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.

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: “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.”

Topaz  CEO, René Kofod-Olsen, stated: “This is an excellent deal for our employees and customers. Being part of a world leading group such as DP World, ensures that we will continue to be an employer of choice for talented individuals and will bring greater strength and benefits to our customers.”

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