Ijara facility to finance fleet growth and global geographic expansion. Gulf Capital investment in GMS is a model case study on value addition by private equity in the Gulf
Abu Dhabi: Gulf Capital, one of the largest and most active investment firms in the Middle East, announced today that one of its portfolio companies, Gulf Marine Services ("GMS"), the largest operator and owner of jack-up barges in the Middle East, is working with Abu Dhabi Islamic Bank ("ADIB") on finalising the syndication of a AED 1.32 billion (USD 360 million) Islamic growth facility that will help continue the Company's rapid expansion programme. ADIB arranged the USD 360 million syndicated Ijara financing to cater for the company growth and funding requirements. ADIB acted as Mandated Lead Arranger, Sole Underwriter and Bookrunner. The deal was extremely well received in the bank market with oversubscription reaching 2x based on strong bids by local and regional banks.
Gulf Capital led a consortium of investors who acquired 100% of GMS in 2007 in one of the most successful control buy-outs in the GCC. GMS provides clients with mobile, safe and stable self-elevating platforms which are used to provide a broad range of offshore support services to the oil and gas industry, including accommodation, construction, maintenance and decommissioning support, and well services. The investment was designed to give Gulf Capital investors an exposure to the fast growing oil and gas industry in the Gulf. GMS was originally established in 1977 and has grown in recent years from a single operation in Abu Dhabi to becoming the number one Middle Eastern player with operations across the GCC. The Company also operates in the UK and the Southern North Sea in both the offshore oil and gas and wind sectors and ranks amongst the top global players by profitability and size of its fleet. Following its acquisition in 2007, Gulf Capital appointed a new senior management team hired globally, led by Duncan Anderson as Chief Executive Officer. Gulf Capital also secured significant expansion capital for the GMS and expanded and renewed the age of the fleet. Over the past five years, the senior management team successfully expanded GMS's fleet and geographical coverage, achieving unprecedented growth. During Gulf Capital's ownership, revenues grew by 460% between 2007 and 2012 and EBITDA and profitability by 750% during the same period. The record growth in profitability was achieved organically and without any bolt-on acquisitions, a strong testament to the value addition by Gulf Capital during the period of its ownership.
Dr. Karim El Solh, Chief Executive Officer of Gulf Capital, commented: "Our investment in GMS has been truly a ground breaking one and will set the model for private equity deals in the region for years to come: a 100% control acquisition in the fast growing oil and gas industry, new management buy-in, operational and profitability enhancement, expansion financing and regional and global growth. During our ownership, GMS profits have grown by more than seven-fold, and the momentum over the coming years continues unabated. GMS today is one of the world's largest and most profitable jack-up barge operators and our long-term goal is to seek a global listing for this exciting Company. We look forward to continuing our participation in GMS's future growth and to continue creating value for our investors."
One of the major milestones reached in recent years was the successful completion and delivery of two new larger Gusto design vessels, Endurance and Endeavour (referred to as "E"-Class barges), by mid-2011. GMS's sophisticated modern fleet of barges has positioned the company as a class leader, with an average age of seven years vs. a global offshore average age of 24 years. The two new Gusto barges introduce a more advanced, flexible, and capable fleet, one that can withstand harsher weather conditions, charter deeper waters, and offer larger deck space, with an enhanced deck load. The fleet can now cater not only to the Oil & Gas industry, but also to the wind farm market. As such, they have enabled the company to recently expand its presence in key markets, such as Saudi Arabia and Southern North Sea, as well as gave it the ability to service other attractive markets, including West Africa and South East Asia. GMS today enjoys strong relationships with its international blue chip client base, which includes a number of national oil companies, international Oil & Gas majors and broader oilfield services companies.
The new ground-breaking Islamic syndicated facility, lead-managed by Abu Dhabi Islamic Bank ("ADIB"), will refinance existing bilateral banking facilities and provide financing for the construction and launch of additional jack-up barges. The facility will also provide for the acquisition of existing vessels and operations around the world. The expansion in the fleet will help GMS capitalise on the growing regional and international need for lift boats and jack-up vessels in the Middle East, North Sea, Africa and South East Asia. GMS will also be able to operate internationally in both the offshore Oil & Gas industry and the growing offshore wind farm market. Additionally, as part of the overall financing, GMS provided a distribution to its shareholders who had continuously reinvested all of the GMS's cash flows into the Company to power its growth over the past six years.
Richard Dallas, Managing Director, Private Equity at Gulf Capital said: "The innovative and highly flexible structure of ADIB's Islamic financing was tailored to meet the Company's needs and will help GMS expand its existing fleet and achieve its global expansion ambitions. Furthermore, the new facility will allow us to take advantage of the prevailing low rates for new loan issues, reduce our overall borrowing and financing costs and enable us to use our strong cash flows to maximum effect. We are delighted with our partnership with ADIB and the banks coming into the GMS relationship and appreciate their vote of confidence in the future of GMS. GMS is now firmly implemented as the leading player in the Middle East and one of the top players globally. This will enable us further to globalise the reach of GMS and cement its position as a major international company."
Arif Usmani, General Manager, Wholesale Banking Group, Abu Dhabi Islamic Bank, concluded: "ADIB is extremely pleased to have been able to work with GMS and Gulf Capital on this ground-breaking Ijara financing and continues its support for a Company that has grown from a local provider to a regional player and now to a global leader. The substantial over-subscription of this syndicated Ijara financing by local and regional banks is a strong testament to the strength and appeal of an issuer like GMS."
About Gulf Capital
Gulf Capital is a leading alternative investment company focused primarily on investing capital in the GCC region. Incorporated in Abu Dhabi in 2006 as a Private Joint Stock Company, Gulf Capital was established with a capital base of AED 1.225 billion (USD 330 million) from 300 of the most prestigious institutional and individual investors in the Gulf. The Firm is currently investing its $533 million GC Equity Fund II, raised from regional and global investors. Gulf Capital is focused on acquiring strategic stakes in highly profitable and rapidly growing companies within a select number of fast-growing industries in the GCC region. Gulf Capital was awarded the "Best Private Equity in the Middle East" award by Banker Magazine in 2011 and 2012. The Firm was also named as the best "Investment Company of the Year" at Arabian Business Achievement Awards in November 2012. Gulf Capital is also actively involved in the real estate development arena through Gulf Related, its joint-venture with the Related Companies, the most prominent private US real estate developer. The Firm also recently announced the launch of a Credit and Mezzanine Business to meet the financing needs of fast growing companies across the region. With its private equity, real estate and credit initiatives, Gulf Capital is today one of the largest alternative asset managers in the Middle East. For more information about Gulf Capital, please visit www.gulfcapital.com.
About Gulf Marine Services
Gulf Marine Services WLL ("GMS" or the "Company") operates the largest independent self-elevated support vessel ("SESV") fleet in the Arabian Gulf, with an international presence in the Southern North Sea ("SNS") region. The Company was established in 1977 and is headquartered in Abu Dhabi, in the United Arab Emirates ("UAE"), and today has operations in the UAE, Qatar, Saudi Arabia and the UK. The Company provides clients with mobile, safe and stable SESV platforms which are used to provide a broad range of offshore support services, including accommodation, construction, maintenance and decommissioning support, and well services. The Company operates and maintains an integrated construction and logistical facility in the UAE, along with the appropriate project management and technical supervisory team to conduct construction and outfitting of new SESVs as well as maintenance of its existing fleet.
The Company has successfully expanded its fleet over the past six years and currently owns and operates a versatile, young and high quality fleet of 12 vessels comprised of (i) nine modern SESVs, (ii) one floating accommodation barge and, (iii) two Anchor Handling Tug and Supply ("AHTS") vessels. The Company employs 343 highly skilled employees of which 88 are employed in GMS's operating base in the Mussaffah industrial area of Abu Dhabi, and 255 are marine crew. For more information about Gulf Marine Services, please visit www.gmsuae.com.
Issued by Borouj Consulting on behalf of Gulf Capital
For more information, please contact: Randa Mazzawi at Tel: +971 43403005, e-mail: randa@boroujconsulting.com , Zeeshan Masud at Tel: +971 55 4614652, e-mail: zeeshan@boroujconsulting.com, or Mayssa Makhlouf at Tel: +971 55 6479075, e-mail: mayssa@boroujconsulting.com
© Press Release 2013
