MacGregor to buy marine and offshore business from TTS Group
MacGregor, a part of Cargotec, has entered into an agreement to acquire marine and offshore business from TTS Group.
MacGregor said on Thursday that TTS, a global provider of cargo handling equipment and services for merchant and offshore ships, sold its businesses for an enterprise value of EUR 87 million ($107M).
TTS Group ASA and its shipyard solution business, TTS Syncrolift AS, are the only businesses excluded from the deal.
According to the company, potential cost synergies are estimated to be around EUR 30-35 million on an annual level and are expected to be reached within three years from closing.
“The acquisition will strengthen MacGregor’s marine and offshore activities in key areas and add further service growth potential through the increased installed base. It will also strengthen MacGregor’s position in China through the strategic joint ventures with Chinese state-owned shipbuilding companies China State Shipbuilding Corporation and China Shipbuilding Industry Corporation,” MacGregor said.
TTS Group’s main products are a wide range of cargo handling and offshore cranes, RoRo access systems, hatch covers, winches, and related services. The company’s service business includes spare parts, maintenance, inspections, modernization, conversion, and training. The group has subsidiaries in Belgium, Brazil, China, Germany, Greece, Italy, Korea, Norway, Poland, Singapore, Sweden, UAE, USA, and Vietnam.
MacGregor also aims to acquire EUR 161 million in sales for the period January-September 2017 from which approximately 27 percent was related to service sales. The net sales of the business aimed to be acquired equals approximately 90 percent of TTS’ net sales.
Michel van Roozendaal, president of MacGregor, said: “This acquisition is an important step in executing MacGregor’s growth strategy and providing customer-focused solutions in both merchant shipping and offshore segments. Combining the strengths of these two companies creates exciting opportunities for innovation and technology development during a time of industry transformation. With a large installed base on over 9,000 vessels, the TTS portfolio will position us even better for our service business growth.”
TTS Group CEO Toril Eidesvik added: “The marine industry is moving towards larger, integrated units with a global presence, offering a broader scope of products and services. In order to meet this challenge a combination of TTS’s marine and offshore activities with MacGregor will be an important step in the consolidation process and is expected to be favorable to all TTS stakeholders in the long term.”
MacGregor said that more than two-thirds of TTS shareholders support the transaction and have committed to vote in favor of the deal in TTS Group’s Extraordinary General Meeting. Also, more than two-thirds of convertible bondholders have made the same commitment, if any of their bonds are converted to shares before the Extraordinary General Meeting.
The acquisition is subject to regulatory approvals from competition authorities, which are expected to be received during the third quarter of 2018.
TTS Group ASA and its shipyard solution business, TTS Syncrolift AS, are excluded from the deal.
According to a separate statement made by TTS on Thursday, the company, proposed to be renamed Nekkar ASA, would build its operation around Business Unit Shipyard Solutions with its ship lift provider brand, Syncrolift.
Nekkar ASA will continue as the holding company for Syncrolift and the future portfolio companies. It will be scaled (staff and cost base) in accordance with the operating requirements of the business going forward. The preliminary assessment indicates a cost level of approximately $2 million per year.