- Ezion has proposed to acquire 30% stake in Rotating Offshore Solutions Pte Ltd (ROS), a Singapore-based marine engineering solution provider specialized in the O&G production related segment.
- Key products for ROS comprise the FPSO topside equipment modules such as Oil Separation/Stabilization Modules, Fuel Gas Compression Modules, Gas Lift and Injection Compression Modules.
- Ezion will subscribe 321,429 shares in ROS for an aggregate consideration of S$18m.
- This represents a 1.2x NTA and 6.9x FY15 PE (FYE Mar), a tad higher than Ezion’s < 1x NTA and 6.0x FY14 PE (FYE Dec).
- In return, Ezion will issue ROS 17.5m new shares in Ezion @ S$1.0287. ROS’s existing business is complementary to Ezion’s.
- It will create synergies to better support Ezion’s customers on their production support related activities in the offshore O&G industry.
- It will also place the two entities in a stronger position to compete with competitors and explore new growth opportunities.
- Maintain BUY on Ezion and TP of S$1.50 (8x FY15 PE).
- The financial impact is immaterial.
(Yeo Kee Yan, Ling Lee Keng)
Source: http://www.dbsvickers.com/
