Intriguing Acquisition: Ashtead Technology Acquires Seatronics and J2 for £63 Million
Global subsea equipment rental and solutions provider Ashtead Technology Holdings plc (AIM: AT.) announced on Thursday the acquisition of subsea electronics and ROV tools rental and services businesses, Seatronics Limited and its subsidiaries, along with J2 Subsea Limited, for a total cash consideration of £63 million. This acquisition from Acteon Group Operations (UK) Limited, majority-owned by One Equity Partners LLC and Buckthorn Partners LLP, is expected to enhance Ashtead's survey and robotics capabilities and accelerate its international growth.
The deal is anticipated to deliver mid to high single-digit earnings accretion in the first full year of ownership and exceed the group’s average cost of capital in terms of return on invested capital. Ashtead Technology's pro forma leverage ratio is expected to be approximately 1.8 times as of June 30, 2024, and fall below 1.5 times by the end of 2025. Completion of the acquisition is subject to standard closing conditions, including approval from the Competition and Markets Authority.
Operating in Singapore, the UAE, the UK, and the USA, Seatronics and J2 have served the offshore energy market as part of the Acteon Group for over a decade. This acquisition will expand Ashtead Technology's rental fleet, adding over 7,000 unique assets and a skilled workforce with extensive field knowledge. The expertise of Seatronics and J2 in subsea oil and gas and renewable energy infrastructure complements Ashtead's existing portfolio, with 55% of the revenue generated outside of Europe.
To finance the acquisition, Ashtead Technology increased its revolving credit facility by £70 million, bringing the total to £170 million, and secured an additional £40 million uncommitted accordion facility. The expanded credit facility is backed by the group’s banking partners, ABN Amro, Citi, HSBC, Virgin Money, and newly added RBS.
The Board of Ashtead Technology is confident in the medium-term prospects for Seatronics and J2 and plans to invest approximately £10 million into the fleet in the first year of ownership. This investment is expected to drive EBITDA growth in the high teens percentage range through the investment period, bringing margins closer to group levels over time.
Ashtead Technology CEO Allan Pirie expressed enthusiasm about the acquisition, highlighting the strategic fit and the potential to enhance the company’s international footprint and customer relationships. Acteon CEO Brice Bouffard shared confidence in the continued growth and value that Seatronics and J2 will bring to Ashtead Technology's global customers.