Kreuz Holdings Limited (“Kreuz” or the “Company”) and SEA9 Pte. Ltd. (“SEA9”), a subsidiary of The Headland Private Equity Fund 6 L.P., a pan-Asian private equity fund advised by Headland Capital Partners Limited (“Headland”) announce a proposed transaction in relation to Kreuz (the “Transaction”).
Kreuz is one of the leading providers of subsea construction and installation services and inspection, repair and maintenance services for customers in the offshore oil & gas industry.
Transaction Details
The Transaction involves a proposed scheme of arrangement (the “Scheme”) under the Companies Act, Chapter 50 of Singapore, and in accordance with the Singapore Code on Take-overs and Mergers. Under the Scheme, all issued and paid-up ordinary shares in Kreuz (“Kreuz Shares”) held by the shareholders of Kreuz (“Kreuz Shareholders”) as at a books closure date to be announced by Kreuz will be transferred to SEA9. Each Kreuz Share will be acquired by SEA9 at a cash consideration of S$0.80 per share, valuing Kreuz at S$445.6 million1.
The cash consideration of S$0.80 per share represents a premium of 11.1% and 39.6% above the 6-months and 12-months volume weighted average prices respectively of Kreuz Shares to November 1, 2013 (the “Latest Practicable Date”). Furthermore, the Scheme consideration represents a price-to-net tangible assets multiple of 1.8 times2 calculated based on Kreuz’s unaudited Net Tangible Assets per share of US$0.361 as at September 30, 2013.
Rationale for the Transaction
The Transaction provides Kreuz shareholders with the opportunity to realise their investment at a premium to recent trading prices of Kreuz shares. The Transaction is also expected to allow Kreuz to continue to develop and execute upon new growth initiatives, such as investing in new vessels to support the business. As an investment adviser to Asia-focused private equity funds with relevant experience, Headland is well positioned to leverage on its expertise to support the Company as it seeks to finance and execute upon these growth initiatives.
Mr Kurush Contractor, the CEO and Executive Director of Kreuz , commented “We are pleased to receive the Scheme proposal from SEA9 and we look forward to working closely with Headland and SEA9 towards ensuring quality performance with accountability to our clients. The incoming delivery of a state-of-the-art Diving Support Vessel, will enhance Kreuz’s capabilities in shallow, deep and ultra deep offshore operations globally, and support Kreuz as it seeks to execute upon its growth initiatives”.
Mr. Paul Kang, a Senior Partner of Headland , commented “The Transaction represents an attractive and exciting opportunity for SEA9 to invest in a focused subsea services provider. Headland and SEA9 are well positioned to partner with Kreuz to provide resources and strategic input to assist the Company in pursuing future growth initiatives”.
Press Release, November 05, 2013