Dubai investment bank Shuaa Capital has secured $160 million for its leveraged buyout of Allianz Marine and Logistics Services Holding, Abu Dhabi’s offshore support vessel (OSV) provider.
The National Bank of Fujairah and the Arab Petroleum Investments Corporation, an energy-focused multilateral financial institution, funded the seven-year deal, Shuaa said in a statement to the Dubai Financial Market, where its shares are traded.
The transaction, struck by Shuaa's managed fund, is one of the largest secured overnight funding rate (SOFR) facilities for a leveraged buyout (LBO) transaction in the region. SOFR is a benchmark for overnight interbank interest rates. LBO deals involve acquisition of an asset with a significant amount of borrowed funds.
The financing arrangement is also one of the few corporate credit transactions in the Middle East with term SOFR as benchmark pricing.
As part of the deal, Shuaa has also secured a seven-year interest rate swap from NBF that will help it to hedge risks.
“The SOFR-based financing solution demonstrates our dynamism to quickly adapt to the evolving trends in the financing markets,” Shuaa group chief executive Jassim Alseddiqi said.
The interest rate swap against the funding product will provide “interest cost visibility and protection against rising rates”.
Shuaa announced the acquisition of Allianz Marine and Logistics in March as one of the largest merger and acquisition deals in the Middle East's maritime offshore sector. It did not provide the value of the deal at the time.
Allianz operates a fleet of about 117 owned and chartered OSVs in the Middle East, comprising a combination of platform supply vessels, anchor-handling tug supply vessels, crew boats, accommodation barges and flat barges.
The company also provides maritime services such as vessel chartering, port logistics and crew services to international and national oil companies, and offshore construction contractors.
This is the second deal for Shuaa in the OSV sector after the acquisition of Dubai-based Stanford Marine Group about two years ago.
With the Allianz Marine deal, the number of OSVs in Shuaa's portfolio has risen to 152, making it the Middle East's largest vessel portfolio and the fourth-biggest fleet in the world.
“We look forward to working with all stakeholders to further develop SMG and Allianz businesses and contribute to the long-term growth of the offshore oil and gas industry in the region,” said Mr Alseddiqi.
Shuaa, which manages $14 billion in assets, reported a drop in first-quarter net profit after writing down intangible assets worth Dh31m ($8.4m).
Net profit attributable to owners of the parent company for the three-month period to the end of March fell to Dh5.6m, from Dh25m in the same period last year, the company said in a May statement.