Singapore offshore services provider Swissco has announced the proposed acquisition of Scott and English Energy, a wholly owned subsidiary of Double Dragon Energy, in a bid to venture into the offshore rig chartering business.
The company has entered into a heads of agreement (HoA), worth approximately S$285m ($225m), with Double Dragon, which will form the basis of the sale and purchase agreement for the entire issued and paid-up share capital in Scott and English.
According to Swissco, the company’s latest move in the offshore oil and gas exploration and production (E&P) sector will lead to a diversification of its fleet business, while representing an investment for long-term growth.
The group expects to obtain potential operational synergies, as well as benefit from the stable and recurring income base arising from the acquisition, which is also set to increase its market capitalisation.
Swissco CEO Alex Yeo said: "The acquisition will combine the expertise, know-how and track record of a leading marine service provider with the sourcing capabilities and industry connections of a fast-growing international rig owner in the offshore oil and gas industry.
"Riding on the robust momentum in the offshore oil and gas sector, the synergies between the two businesses will diversify the earnings base for the company while providing it with stable, recurring income."
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In order to fuel its future growth, Scott and English proposes to acquire additional rigs either through majority ownership or by forming joint-venture partnerships with companies.
Growth plans of the company include geographical diversification to reach out to new markets and national oil companies (NOCs), and expansion by acquiring new rigs.
The acquisition is regarded as a substantial acquisition under the rules of the SGX listing manual and is also subject to the approval of SGX.
Image: Swissco’s move in the offshore oil and gas E&P sector will lead to a diversification of its fleet business. Photo: courtesy of think4photop / FreeDigitalPhotos.net.