Adani Ports and Special Economic Zone rose 3.76% to Rs 882 after the company announced the acquisition of Ocean Sparkle, India's largest third-party marine services provider.
The company through its subsidiary, The Adani Harbour Services (TAHSL), has entered into a definitive agreement for the acquisition of 100% stake in Ocean Sparkle (OSL).
Ocean Sparkle is engaged in the business of port operations and marine services. The company was established in 1995 by a group of marine technocrats with P Jairaj Kumar as the chairman and MD, who will continue as the chairman of the OSL board.
Key activities carried by OSL include towage, pilotage, and dredging services. It has an asset base of 94 owned vessels and 13 third-party-owned vessels. The company's consolidated revenue for FY 2020-21 was Rs 622.10 crore.
OSL has long-standing relationships with its existing clients, with contracts ranging from 5 to 20 years (the average length of contracts is approximately 7 years). Further, the contracts are on a take-or-pay basis, thereby providing robustness to OSL's business model.
The company has a presence in all the major ports, 15 minor ports, and all the 3 LNG terminals in India. It has significant experience in global maritime servicing through its operations in Oman, Saudi Arabia, Sri Lanka, Qatar, Yemen, and Africa.
OSL has been valued at an enterprise value of Rs 1,700 crore with Rs 300 crore of free cash in the company.
Adani Ports will acquire 75.69% stake of OSL for a cash consideration of Rs 1,135.30 crore from its promoters, financial investors, and other shareholders.
APSEZ will indirectly acquire the remaining 24.31% stake of OSL by acquiring 100% stake of Savi Jana Sea Foods for Rs 394.87 crore from its promoters and other shareholders.
Savi Jana is promoted by the promoters of OSL. Savi Jana has negligible operations and holds 24.31% stake in OSL.
Karan Adani, CEO and whole-time director, APSEZ, said: Given the synergies of OSL and Adani Harbour Services, the consolidated business is likely to double in five years with improved margins, thereby creating significant value for APSEZ's shareholders.
This acquisition not only provides APSEZ a significant share of India's marine services market but also provides us a platform for building a presence in other countries, thereby facilitating APSEZ's journey towards becoming the largest port operator globally by 2030 and the largest integrated transport utility in India.
APSEZ expects to complete the said transactions within one month.
Adani Ports & Special Economic Zone (APSEZ) is in the business of development, operations, and maintenance of port infrastructure (port services and related infrastructure development) and has linked multi-product Special Economic Zone (SEZ) and related infrastructure contiguous to Port at Mundra.
On a consolidated basis, the company reported a 5.7% decline in the net profit to Rs 1,472.26 crore on a 1.4% increase in net sales to Rs 3,797.10 crore in Q3 FY22 over Q3 FY21.
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