Neptune to raise $17.3m for acquisitions

Perth-based company Neptune Marine Services aims to raise $17.3 million through a placement and renounceable rights issue, to be spent on acquisitions in line with the company's growth strategy.

The company announced plans to acquire Perth-based Allied Diving Services Pty Ltd, an offshore oil and gas and civil marine diving contractor, in May this year.

The acquisition will be made by an upfront payment of $2.1million in cash and scrip, with the final purchase price being subject to a 2-year earn-out period based on the business' ongoing performance and an agreed EBIT multiple.

Neptune has also announced plans to acquire Darwin-based Territory Diving Services for $3 million in cash and scrip plus a performance-based earn-out.

Shares in the company were up 6.6 per cent today to 24c.

The full text of a company announcement is pasted below

Marine services company Neptune Marine Services today announced a major step in its Strategy for Growth, with the company implementing a capital raising of a minimum of $17.3 million. The capital raising comprises of:

• A placement of 5 million shares at 20 cents per share to raise $1 million; and
• A 2:1 renounceable rights issue of 81.7 million shares at 20 cents per share to raise a minimum of $16.3 million.

The placement was made to Australian institutional investors and clients of Patersons Securities Limited who are Lead Manager of the placement and Underwriter to the rights issue.

Neptune's Managing Director Mr Christian Lange said: "This is a significant step for Neptune and gives us the flexibility to accelerate the company's Strategy for Growth. The response to the capital raising has been encouraging, especially from new institutional shareholders.

"Our immediate priority is to proceed with the two acquisitions we have previously announced - Allied Diving Services and Territory Diving Services. These businesses add $8 million in annualised revenue and give us greater critical mass.

"Neptune is also being asked to tender for other larger-scale inspection, repair and maintenance projects, and a stronger financial foundation gives us the ability to secure and execute these projects.

"Over the next five years, $40 billion will be spent on offshore oil and gas infrastructure in Australia. Neptune will be one of the few Australian companies able to provide an end-to-end IRM service to customers in this sector. Additionally, the flow of work in the defence and merchant marine sectors is also growing.

"Neptune is in the best position in its short history to capitalise on strong market conditions and the expanded range of IRM services we are assembling. Our pipeline of bidding activity is encouraging, and we are continuing to assess other acquisition opportunities that enhance our service capability and make an immediate contribution to earnings," Mr Lange said.