Ports Shipping and Logistics (Commonwealth Union) – Adani Ports and Special Economic Zone Ltd (APSEZ), India’s largest ports and logistics company, has signed a definitive agreement to acquire an 80 percent stake in Astro through an all-cash transaction valued at USD 185 million. This deal suggests an enterprise value (EV) of USD 235 million for Astro, with an EV/EBITDA multiple of 4.4x based on FY25 estimates. The acquisition is anticipated to enhance value from the first year onward.
All-cash transactional acquisitions, also known as cash deals, have become increasingly popular in recent years as companies look to consolidate their industries and expand their market share. This type of acquisition involves the purchasing company paying the full purchase price in cash, rather than using a combination of cash, stock, or debt.
One of the primary advantages of an all-cash deal is that it allows the acquiring company to avoid the dilution of its stock and the potential negative impact on its stock price. Additionally, all-cash deals can be completed more quickly than deals involving stock or debt, as there is no need for shareholder approval or complex financing arrangements.
Founded in 2009, Astro is a prominent global operator of offshore support vessels (OSVs) in regions including the Middle East, India, Far East Asia, and Africa. Astro operates a fleet of 26 OSVs, including Anchor Handling Tugs (AHTs), flat-top barges, Multipurpose Support Vessels (MPSVs), and workboats. The company also provides vessel management and related services. For the fiscal year ending April 30, 2024, Astro reported revenue of USD 95 million and an EBITDA of USD 41 million. As of April 30, 2024, the company was net cash positive.
Astro boasts an impressive list of Tier-1 clients, including NMDC, McDermott, COOEC, Larsen & Toubro, and Saipem. The company is a significant player in the offshore construction, fabrication, and transportation sectors. Its pre-qualified status with major global EPC contractors and capability to deliver a diverse range of ocean-going vessels have helped it secure top-tier customers in the oil and gas industry. Astro’s extensive experience in supporting the construction and maintenance of offshore platforms, oil and gas fields, and subsea facilities allows it to offer advanced services to clients in the offshore exploration and drilling markets. Astro’s vessels also assist in various operations for major global dredging companies, including large offshore construction and land reclamation projects. The company effectively utilizes a mix of medium- to long-term contracts with clients, enabling it to maintain high fleet utilization and capitalize on rising charter rates due to the limited global supply of OSVs.
“Astro’s acquisition is part of our roadmap to becoming one of the world’s largest marine operators. Astro will add 26 OSVs to our current fleet of 142 tugs and dredgers, taking the total count to 168. The acquisition will also give us access to an impressive roster of Tier-1 customers while further consolidating our footprint across the Arabian Gulf, the Indian subcontinent and Far East Asia. We look forward to working closely with Astro’s leadership team and scaling up the current platform,” explained Mr Ashwani Gupta, who is Whole-time Director & CEO, APSEZ.
Mr. Mark Humphreys, Managing Director of Astro Offshore stated that over the last 15 years, they have built a remarkable company trajectory through strategic investments in their OSV fleet and strong partnerships with their customers. He further indicated that their collaboration with APSEZ marks a pivotal moment for us. Together, we can drive growth, enhance the scale and diversity of our fleet, expand our global reach, and deliver more comprehensive solutions to our customers.
As there are no regulatory approvals needed, the transaction is anticipated to close within a month, pending the fulfillment of operational conditions precedent.
As Adani takes over astro offshore the news about Adani port takeover is likely to be keenly watched by players of the shipping industry as Adani ports is a key player both in India and across the worlds.
