Posted on April 26, 2022
The stock of Adani Ports and Special Economic Zone went up 3 per cent on Friday, after the
company announced that it was buying Ocean Sparkle, a leading third-party marine services provider, at an enterprise valuation of Rs 1,700 crore.
Ocean Sparkle is a leading player in towage, pilotage, and dredging with an asset base of
94 own vessels and 13 third-party vessels. The company, with Rs 300 crore of free cash, was established in 1995 by a group of marine technocrats with P Jairaj Kumar as chairman. Kumar will continue as chairman of the OSL board.
According to the plan, The Adani Harbour Services (TAHSL), an Adani Ports subsidiary, signed an agreement with the promoters of Ocean Sparkle to acquire a 75.69 per cent stake of OSL for Rs 1,135 crore; it will buy the entire stake in Savi Jana Sea Foods, which owns the remaining 24.31 per cent in OSL, for Rs 395 crore.
In the past five years, the company has acquired several ports across India to reinforce its numero uno position in the port and marine sectors.
Last financial year, the group acquired Gangavaram and Krishnapatnam ports.
“Given the synergies of OSL and Adani Harbour Services, the consolidated business is likely to double in the five years with improved margins, thereby creating significant value for APSEZ’s shareholders,” said Karan Adani, CEO and whole-time director, APSEZ. “
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 largest integrated transport utility in India,” Adani said.
OSL has long-standing relationships with its existing clients, with contracts ranging from 5 to 20 years (average contract is for 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. The company reported consolidated revenue of Rs 622 crore in the financial year ended March 2021.
