DP World nets decent deal due to tricky IPO waters
DP World , one of the world’s biggest port operators, has avoided overpaying thanks to tricky conditions for initial public offerings. The $13 blnDubai-listed port business said on Monday it is buying energy shipping company Topaz Energy and Marine from Oman-listed Renaissance Services and Standard Chartered Private Equity for $1.1 billion including debt. That’s a decent deal.
At one point Topaz’s owners were looking to list the company. Judging by the $1.5 billion initial public offering valuation that was reported by Bloomberg in September, they were hoping for a higher price tag than they got. But changing course before any official announcement was made was probably wise. Topaz cancelled a London listing in 2011. Conditions may have been no better this time given Spanish oil and gas company Cepsa had to pull its IPO last year and was eventually bought by private equity firm Carlyle Group .
European IPO markets have been capricious. True, oil prices of around $66 a barrel may have drummed up more interest in an IPO. Energy shipping companies like Topaz tend to do better when oil prices are higher because it encourages companies to pump more oil. But both energy and stock markets are jumpy right now. DP World may be the bigger winner, but the sellers are right to cut the deal and walk away.
– DP World, one of the world’s largest port operators, said on July 1 it was acquiring Dubai-headquartered Topaz Energy and Marine, which provides marine logistics to the global energy industry, for $1.1 billion including debt from Oman-listed Renaissance Services and Standard Chartered Private Equity.
– Sultan Ahmed Bin Sulayem, group chairman and chief executive of DP World, which is also based in Dubai, said in a statement that the deal fitted with the company’s strategy of increasing its presence in the global logistics and maritime services industry.