Ship manager and marine services outfit V.Group will have less debt and a bigger expansion war chest under its new owning consortium, chief executive Rene Kofod-Olsen told TradeWinds.
On Monday, it was revealed that London-based Star Capital had become the fourth private equity player to take ownership of the company in the past 17 years.
Star Capital teamed up with diversified Antwerp-based investor Ackermans & van Haaren to buy V.Group from Advent International for an undisclosed fee.
Kofod-Olsen said it was a change of ownership that had not been planned, but was an opportunity that arose as Advent International looked to ensure the operation was supported and had the right structure for its new strategy to at least double profitability.
“We know exactly where we want to be going forward. And so when this became an opportunity, Advent engaged and I’m very happy to see this very strong consortium coming together and supporting the company, and actually really focusing on ensuring that the capital structure is now also in place for our long-term strategy,” he added.
Omers Private Equity bought the world’s largest third-party ship manager from Exponent in 2011 for an enterprise value of $520m.
Omers then sold a majority stake in the firm to Advent in 2016 for $588m.
After the takeover, Advent International installed Ian El-Mokadem as chief executive. He had a track record of working with private equity owners and a mandate to build a data-led company towards a long-awaited stock listing.
He was replaced in the hot seat by former GasLog boss Graham Westgarth, who added some shipping know-how to the team despite the departure of some well-known industry names. Under Westgarth, talk of an IPO was also quickly silenced.
Kofod-Olsen would not be drawn on how the current deal compares on price.
“What I can say is that the company in itself has been doing reasonably well. And our new strategy has been appeasing our clients,” Kofod-Olsen said.
“We have very, very clear shipping focus and a very, very clear services focus.
“And this is the core of our business and we are very happy to serve shipping. And we see a further growth of outsourcing as shipping is just becoming more and more complicated,” he added.
The boss, who joined in 2020, described Advent International as a “great owner”.
Pedigree partners
“We thank them very, very much for everything that they have done. We are really looking forward as a team to work with the new consortium, and having such a pedigree partnership coming in,” the CEO said.
Star Capital has invested in other maritime firms before, including German engineering group Blohm+Voss and boxship player MPC Container Ships.
Ackermans & van Haaren has majority stakes in offshore energy, dredging, marine infrastructure, construction and environmental works players Deme Group, CFE and Otary.
“All the investors here, they understand shipping and have been exposed to shipping. And I think that is very significant for me, for the team, that we are having a board of directors and ownership now that completely understands what we’re doing every single day,” Kofod-Olsen said.
The company took on large debt in a 2017 refinancing after the Advent International deal, with term loans totalling $687.5m due in 2025.
Total borrowings at the end of 2022 stood at $610m.
Capital structure enhanced
The CEO said the new deal “significantly enhances the company’s capital structure” through refinancing and debt reduction.
“This is a very strong investment from this consortium. We are significantly reducing the current debt and it’s very positive for the company,” he added.
“There will be a completely new capital structure and with a significant deleveraging of the balance sheet,” Kofod-Olsen said.
Revenue increased to $658m in 2022, from $602m the year before, with Ebidta up at $90m, versus $66m.
The 2022 accounts showed 2,829 staff onshore. There is also a global pool of 44,000 seafarers.
The highest-paid director received $2.3m.
The CEO said 2023 was a “good year” and had been in line with 2022.
