Dyna-Mac's West yard in Singapore; Source: Dyna-Mac

New acquisition bringing more fabrication capacity to Dyna-Mac’s table

Singapore’s offshore builder Dyna-Mac is in the process of expanding its fabrication capacity for current and future projects, thanks to the signing of a share purchase agreement (SPA) to acquire 100% of the total issued and paid-up share capital of Exterran Offshore, which will be renamed and integrated into the company.

Dyna-Mac's West yard in Singapore; Source: Dyna-Mac

This acquisition will enable Dyna-Mac to secure access to Exterran Offshore’s yard facilities of approximately 4.5 hectares along Gul Road, which will provide additional fabrication capacity for the firm’s current and future projects. This will in turn allow the company to undertake larger projects, and more complex modular construction work, along with those involving hydrogen and ammonia piping.

The additional workshops are expected to give Dyna-Mac the ability to consolidate piping fabrication, reducing the need for outsourcing and rentals, thereby lowering costs, boosting productivity, and improving overall product quality. The new site, whose lease expires in 2030, is located beside the company’s main module assembly facility at Gul Road, and complements its ongoing strategic reorganization of its facilities along that stretch.

According to the Singapore player, this acquisition expands its projected total waterfront length along Gul Road to more than 680 meters, which opens doors to the improvement of the firm’s current method of construction via split modules, shortening the time to deliver projects and providing an option to work on cable manufacturing and modules for the pharmaceutical sector.

Lim Ah Cheng, Dyna-Mac’s Executive Chairman and Chief Executive Officer, commented:  “The strategic acquisition of the acquired entity underscores our commitment to opportunistic value creation, and creates a multitude of synergies and opportunities for the group. This milestone not only reflects our dedication to growth and expansion, but also sets us up for sustained success and strengthens our position in the industry. We look forward to driving innovation, integrating the new facility’s strengths seamlessly into our operations, and delivering even greater value to all our stakeholders.”

Furthermore, the company underlined that the aggregate cash consideration of the SPA was $8.25 million, which was arrived at following arm’s length negotiation, on a willing buyer willing seller basis mainly based on consideration of the land and building value. The latest available unaudited net tangible asset value and net book value of Exterran Offshore as of December 31, 2023, is $3.65 million, including $2.51 million in cash.

Dyna-Mac highlights that the latest valuation report conducted by an independent valuer, OrangeTee Advisory, in August 2023 valued the land and building owned by Exterran Offshore at S$17 million (nearly $12.8 million) using the income capitalization method and direct comparison method. The only existing contract signed by Exterran Offshore was novated to an entity within the Enerflex group.

Dyna-Mac is adamant that it is not assuming and will not be liable for any liabilities, debts, or obligations of Exterran Offshore before the acquisition, which is not expected to have a material impact on the company’s net asset value and net profits for the financial year ending on December 31, 2024.

Dyna-Mac secured several new deals in 2023, including a new batch of contract wins in October 2023 with existing customers worth a total provisional sum of S$88 million (over $64.1 million), expanding its net order book to S$630.7 million (more than $459.4 million).

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The main contract involves the construction of topside modules for a floating production storage and offloading (FPSO) vessel, which is slated to start in 1Q 2024.