Value Creation Case Studies

Icon Offshore Berhad (ICON)

Icon Offshore Berhad (ICON)

Background

  • ICON Offshore Berhad (ICON) is the largest Offshore Supply Vessel (OSV) provider in Malaysia and one of the largest in Southeast Asia in terms of number of OSVs.
  • The company has 32 vessels operating in waters off Malaysia, Thailand and Brunei. The vessels have had a history of international operations in more than 6 countries in the Southeast Asian region.

Investment Rationale

  • Strong track record of delivering growth.
  • Platform for building one of the largest local OSV players.

Transaction Details

Investment type
Majority investment in a strong Malaysian company
Acquisition Date
November 2012, merger of TKS and Omni
Ownership
42.3%
Partial Divestment
June 2014

Key Value Creation Metrics

  • Buy & Build Strategy

    • Following Ekuinas initial investment into Tanjung Offshore Berhad (TOB) in 2010, the marine business under Tanjung Kapal Services (TKS) was demerged in 2012 and we disposed the remaining investment in TOB
    • Ekuinas also acquired Omni Petromaritime Sdn Bhd (OMNI), another OSV player in Nov 2012
    • Ekuinas then initiated a merger between TKS and OMNI under Icon Offshore Bhd with the aim of creating a leading Malaysian OSV player.
  • Post Merger Integration & Value Creation

    • Ekuinas worked closely with the combined management team to develop a detailed integration and value creation plan
    • The merged entity benefited from revenue and cost synergies, enhanced financial performance discipline and stronger corporate governance
    • It also secured new contracts, improved utilisation rate, expanded its fleet and improved service quality
  • Initial Public Offering (IPO) & Listing On Bursa Malaysia

    • ICON listed on Bursa Malaysia on 25 June 2014, raising RM1 billion from capital markets with primary proceeds used for fleet expansion and repayment of borrowings
    • The IPO realised RM545.4m for Ekuinas, generating a realised IRR of 68.0% or 2.6x money multiple
    • This enabled the distribution of RM200m in gains from Ekuinas to Yayasan Pelaburan Bumiputera to benefit the Bumiputera community

Ekuinas toiled with us to achieve our objective of becoming a listed company. I am grateful for all their assistance in this process. I would advise companies to grab the opportunity to work with a private equity firm. They have the skills, expertise and knowledge to take your business to the next level.

Dr Jamal Yusof

Previous Chief Executive Officer of ICON Offshore Berhad