Global Marine Group (GMG) will acquire Fugro (FUR.AS)’s trenching and cable laying business in exchange for an equity stake of around 24 percent in the combined business valued at $65 million, and a one year secured vendor loan of $ 7.5 million. Fugro said it will realize a gain on this transaction, valued at approximately $73 million.
GMG is a supplier of subsea cable installation and maintenance services in the telecoms, offshore renewables, power and oil and gas market segments. The acquisition of Fugro’s trenching and cable laying business provides added high-end capabilities that strengthen its service offering. The transaction involves the transfer of the vessel Fugro Symphony, two trenchers and two work class remotely operated vehicles (ROVs) as well as 23 employees located in Aberdeen.
Ian Douglas, CEO of Global Marine Group, said, “I am looking forward to welcoming the Aberdeen based trenching team to our corporate family and growing our asset and capabilities base. As we continue to carefully build and develop our business in support of our long-term strategic view, we are delighted to partner with Fugro, with its long standing world-wide expertise in many segments of the offshore services markets.”
Fugro will participate in a more diversified business in which cable installation services are complemented with long-term telecom cable and wind farm maintenance services and sales of subsea telecom systems. In addition, Fugro will become the preferred provider of marine site characterization and asset integrity services to GMG.
Fugro CEO, Paul van Riel, said, “A key objective of Fugro’s ‘Building on Strength’ strategy is to seek a partnership or divest our construction and installation related marine activities. We have taken a major step forward in delivering on this strategic objective by contributing our trenching and cable laying business towards a promising partnership with GMG. Fugro will participate in a profitable and diversified business with solid growth potential. This step will also support Fugro’s further growth in the nautical market segment.”
In 2016, Fugro’s trenching and cable laying business generated revenue of €31 million ($36.7 million). In the same period, GMG’s revenue was $ 162 million.
The transaction is subject to customary closing conditions, and is expected to close in the fourth quarter of 2017.