Integrated, Mermaid positive on strategy

Ten months ago, Perth companies Mermaid Marine and Integrated Group finalised an asset swap that sharpened their focus on their core markets. In the past two months, however, they have negotiated deals that transformed their respective businesses.

Mermaid and Integrated have gone from specialist, stand-alone industrial service providers to being part of much larger businesses.

And in both cases, they have presented the market with an agreed merger deal rather than forcing a contested or hostile takeover battle.

Labour hire firm Integrated announced this week it had negotiated a $190 million merger with Melbourne company Programmed Maintenance Services via a scheme of arrangement.

In reality it looks closer to a takeover, with Programmed’s chairman and managing director keeping those positions.

Integrated chairman Neil Hamilton and founder Jon Whittle will join the Programmed board, while Integrated chief executive Chris Sutherland will run the recruitment, marine and technical maintenance arms of the merged company, which roughly correspond to Integrated’s existing business.

Programmed chairman Geoff Tomlinson said the transaction was an opportunity for his company, which offers a range of contract services to extend its service offering into the labour hire market.

“The two businesses have an outstanding strategic and operational fit,” he said.

Mr Sutherland said the combined company would deliver benefits to its customers and staff.

“PMS brings to Integrated a presence in New Zealand and the UK which provides the potential for faster expansion of Integrated’s recruitment, marine and labour hire services into these countries,” he said.

The merged company will have annual revenue of $800 million and earnings before interest, tax and depreciation of $73 million.

The Integrated deal followed the late December merger deal between marine services company Mermaid Marine and P&O Maritime Services Pty Ltd.

P&O’s owner, Dubai-based DP World, will emerge with a 60 per cent shareholding in Mermaid, which plans to change its name to P&O Marine.

The merger of the two businesses is designed to create a large, diversified marine services company with annual revenue of $200 million and 1,300 employees.

The merged company will own and operate 40 specialist vessels and manage 100 vessels for third parties. By comparison, Mermaid currently operates a fleet of 24 vessels and is highly focused on the oil and gas industry in the North West Shelf.

Mermaid chairman Tony Howarth will chair the merged company, while P&O’s Melbourne-based chief executive Andrew King will continue in that role.

Mermaid chief executive Jeff Weber will be a director and chief operating officer of the merged business.