AIMCo Backed Fund Backs Cyan Renewables' Acquisition of MMA Offshore

Yantoultra Ngui and Roushni Nair of Reuters report Cyan Renewables buys Australian vessel operator MMA Offshore for A$1.1 bln:

Singapore's Cyan Renewables, which operates vessels for offshore wind farms, said on Thursday it has bought MMA Offshore for A$1.1 billion ($726 million) in the largest takeover deal in this renewables segment in the Asia Pacific region so far this year.

MMA shareholders will receive A$2.70 per share in cash, a 36% premium over its 90-day average price, according to a joint statement from Cyan and Australia-based MMA.

Cyan, which is backed by infrastructure investor Seraya Partners, had initially offered A$2.60 per MMA share in March before sweetening the offer last month.

In a separate statement, MMA said the scheme of arrangement between the company and its shareholders for Cyan's acquisition has been implemented and the delisting of MMA is expected to take effect on Friday.

MMA's shares have climbed almost 44% this year, giving it a market capitalisation of $702 million, LSEG data showed.

Renewable companies and assets have become increasingly attractive as investors look to tap growth in the sector, driven by a global drive to transition to zero-emission economies.

The global wind farm market is projected to grow at a compound annual rate of 21.4% by 2034, according to the International Energy Agency.

MMA, headquartered in Perth, Australia, operates 20 vessels and has more than 1,100 employees in Singapore, Taiwan, Malaysia, Dubai and Britain, according to its website.

"This move strengthens our position in the Asia-Pacific region and solidifies our leadership in the offshore wind industry and energy transition," said Lee Keng Lin, Cyan Renewables' CEO.

A group of co-investors supported the deal, with one of them, Canadian investment manager AIMCo, also participating through its investment in Cyan, the statement said.

In January, Cyan agreed to acquire a 75% stake in UK-based Sentinel Marine, a maritime environmental response vessel operator, according to a press release at that time that did not disclose financial details.

Earlier today, AIMCo issued a press release stating Singapore-based Cyan Renewables acquires Australian vessel operator MMA Offshore, becoming the largest APAC platform for offshore wind energy services globally:

Singapore and Perth, Australia - Cyan Renewables (“Cyan”), Asia’s leading offshore wind services platform based in Singapore, today announced its acquisition of Australian offshore marine services provider MMA Offshore (“MMA”) (ASX:MRM) for US$714M (A$1.1B). This transaction marks the region’s largest take-private deal in the offshore wind energy services industry, strengthening Cyan's position in the Asia Pacific (APAC) region and underscoring the sector's crucial role in achieving net zero goals.

MMA shareholders will receive US$1.81 per share in cash, representing a 31% premium over the 90-day volume-weighted average share price, and EV/EBITDA ratio stands at 6.2x. MMA’s projected EBITDA is $146 - 149M for FY2024, a more than 110% increase over the previous year’s $69.3M, highlighting MMA’s strong performance and reflecting sustained growth and operational efficiency.

James Chern, Managing Partner and CIO of Seraya Partners, said, “The new deal is transformative and reflects our ability to build and create platforms from scratch, spanning from Asia to Europe. With Cyan's acquisition of Sentinel in the UK and now MMA in Australia, we are rapidly establishing world-class leaders in new, fast-growing sectors.”

The acquisition was supported by a group of co-investors, including the Alberta Investment Management Corporation (AIMCo). AIMCo, which opened its office in Singapore in September 2023, participated in the MMA acquisition through its investment in Cyan. Ben Hawkins, AIMCo’s Executive Managing Director, Global Head of Infrastructure, Renewable Resources and Energy Transition, said, “AIMCo is pleased to expand our partnership with Seraya to collaborate on this exciting opportunity to build next-generation infrastructure in Asia. As a clear market leader, Cyan is strategically positioned to benefit from the growing offshore wind and marine protection sectors, and this acquisition positions it as an important catalyst in the ‘blue-to-green’ transition of this space.”

Lee Keng Lin, CEO of Cyan Renewables, said, “The acquisition of MMA is a significant milestone for our future as a leader in the renewable energy space. This move strengthens our position in the Asia-Pacific region and solidifies our leadership in the offshore wind industry and energy transition. This acquisition brings extensive maritime services expertise and a strong operational presence in key markets such as Australia and the broader APAC region.”

Cyan plans to retain MMA’s workforce, leveraging and expanding its expertise, assets, and operating model to further penetrate the offshore wind support services market globally and in Asia. In addition to supporting existing clients in the offshore energy and broader maritime industries with its marine and subsea services, Cyan will actively pursue growth opportunities through mergers and acquisitions and organic expansion.

MMA’s leadership in Australia, highlighted by its fleet of 20 offshore vessels and deep operations in Asia Pacific, will strengthen Cyan's regional presence. In addition to MMA leveraging Cyan as a capital partner, MMA will benefit from Cyan’s extensive knowledge in offshore wind farms, such as installation and operations and maintenance (O&M) expertise and proven track record in Europe, to improve service offerings and operational efficiencies.

David Ross, Managing Director of MMA said, “We are excited to be part of the Cyan Group to accelerate progress in achieving net zero goals in the maritime industry. Cyan’s expertise in offshore wind farms and investment capability, combined with our best-in-class maritime and offshore solutions, will foster innovation and operational excellence, accelerating the energy transition.”

The deal comes amid increasing demand to adopt renewable and clean energy. According to the International Energy Agency (IEA), global clean energy capacity must triple by 2030 to meet net zero emissions by 2050. The wind farm market is projected to grow at a CAGR of 21.4% from 2024 to 2034. At the same time, the global demand for vessels in the offshore wind sector is expected to outpace supply significantly, particularly as the average turbine size has increased, with some projects now planning to install turbines as large as 15MW.

About Cyan Renewables

Headquartered in Singapore and majority owned by Seraya Partners, Cyan Renewables is Asia's first dedicated offshore wind vessel operator supporting the fast-growing offshore wind farm industry and the marine sector’s transition from “blue to green”. Built on the strong foundation of a team led by industry veterans, Cyan Renewables aspires to accelerate the growth of the global offshore wind sector by investing in a dedicated fleet of wind farm support vessels to support the full lifecycle of offshore wind farms from installation to servicing and maintenance. By being the partner of choice to both wind farm developers and vessel operators, Cyan Renewables aims to facilitate the world’s transition towards a greener future built on sustainable renewable energy. For more information, please visit cyanrenewables.com

About MMA Offshore

MMA Offshore is a leading provider of marine and subsea services globally. With its fleet of modern offshore vessels and our marine, subsea and project logistics expertise, MMA delivers pioneering blue solutions to support energy and offshore renewables projects, governments and coastal infrastructure around the world.Whether delivered as a singular solution, or an end-to-end integrated project – MMA partners closely with our clients to provide innovative, fit for purpose solutions to solve the most demanding marine challenges. Headquartered in Perth, Western Australia, MMA has a global presence, with offices in Singapore, Taiwan, Malaysia, Dubai and the United Kingdom. For more information, please visit mmaoffshore.com

About Seraya Partners

Seraya Partners is the first Asia-based independent private equity fund for next-generation infrastructure investing, headquartered in Singapore. Seraya Partners targets control-oriented, middle-market platform investments in next-generation infrastructure focusing on the digital infrastructure and energy transition sectors, primarily within the developed Asia-Pacific region and Southeast Asia. Seraya has offices in Singapore, Kuala Lumpur, Seoul, Tokyo, and Denmark. For more information, please visit serayapartners.com

About Alberta Investment Management Corporation (AIMCo)

AIMCo is one of Canada’s largest and most diversified institutional investment managers with more than C$160.6 billion of assets under management as at December 31, 2023. AIMCo invests globally on behalf of pension, endowment, insurance, and government funds in the Province of Alberta. With offices in Edmonton, Calgary, Toronto, London, Luxembourg, New York, and Singapore, our more than 200 investment professionals bring deep expertise in a range of sectors, geographies, and industries.

Late last year, I discussed how the Asian Infrastructure Investment Bank (AIIB), AIMCo and BlackRock backed Singapore-based Seraya Partners' “Seraya Partners Fund 1” with almost US$800 million raised. Read that comment here to get a good backgrounder.

Well, Seraya Partners didn't waste much time backing Singapore's Cyan Renewables, which operates vessels for offshore wind farms, to acquire MMA Offshore for US$726 million in the largest take-private deal in the renewables segment in the Asia Pacific region so far this year.

As per AIMCo's press release:

MMA shareholders will receive US$1.81 per share in cash, representing a 31% premium over the 90-day volume-weighted average share price, and EV/EBITDA ratio stands at 6.2x. MMA’s projected EBITDA is $146 - 149M for FY2024, a more than 110% increase over the previous year’s $69.3M, highlighting MMA’s strong performance and reflecting sustained growth and operational efficiency.

James Chern, Managing Partner and CIO of Seraya Partners, said, “The new deal is transformative and reflects our ability to build and create platforms from scratch, spanning from Asia to Europe. With Cyan's acquisition of Sentinel in the UK and now MMA in Australia, we are rapidly establishing world-class leaders in new, fast-growing sectors.” 

Ben Hawkins, AIMCo’s Executive Managing Director, Global Head of Infrastructure, Renewable Resources and Energy Transition, explains why this is an attractive deal:

“AIMCo is pleased to expand our partnership with Seraya to collaborate on this exciting opportunity to build next-generation infrastructure in Asia. As a clear market leader, Cyan is strategically positioned to benefit from the growing offshore wind and marine protection sectors, and this acquisition positions it as an important catalyst in the ‘blue-to-green’ transition of this space.”  

"This move strengthens our position in the Asia-Pacific region and solidifies our leadership in the offshore wind industry and energy transition," said Lee Keng Lin, Cyan Renewables' CEO.

Not much else to add here except to state that AIIB, BlackRock and AIMCo were right to back Seraya Partners as they are building a leading platform here to service offshore wind farms.

And as the Reuters article mentions, renewables companies and assets have become increasingly attractive as investors look to tap growth in the sector, driven by a global drive to transition to zero-emission economies. 

In fact, from AIMCo's press release:

The deal comes amid increasing demand to adopt renewable and clean energy. According to the International Energy Agency (IEA), global clean energy capacity must triple by 2030 to meet net zero emissions by 2050. The wind farm market is projected to grow at a CAGR of 21.4% from 2024 to 2034. At the same time, the global demand for vessels in the offshore wind sector is expected to outpace supply significantly, particularly as the average turbine size has increased, with some projects now planning to install turbines as large as 15MW.

That means the secular trend in this area will continue for many more years and AIMCo and other co-investors are looking to be leaders in this space.

Also worth noting that Cyan plans to retain MMA’s workforce, leveraging and expanding its expertise, assets, and operating model to further penetrate the offshore wind support services market globally and in Asia.  

Lastly, this deal underscores how critically important AIMCo's Singapore office which was opened last year in September is to gain access to the best deals in the region. Headed up by Kevin Bong, Senior Managing Director, Chief Investment Strategist and Head of Singapore, it will be instrumental in beefing up deal activity in the region. 

Below, MMA Offshore was proud to showcase its fleet of high specification vessels, comprehensive suite of offshore services, subsea services and project logistics solutions at the 2020 Australasian Oil & Gas Conference & Exhibition.

Interestingly, felt the wrath of mining bust and the market between 2014-2018 with the financial performance and valuation nose-diving but the company is back and healthier (see second clip).

Lastly,while the offshore wind energy sector presents its unique set of challenges, energy and infrastructure lawyer, Marcella Stokell, sheds light on why investors should maintain their optimism. There are clear pathways to success, and these deals are indeed achievable.