Singapore-based offshore oilfield service provider Ezion’s plan to acquire 30% of compatriot marine engineering solution provider Rotating Offshore Solutions would bring synergies for the former, said analysts.
Ezion made the announcement on 6 July.
Rotating Offshore Solutions’ key products comprise FPSO topside equipment modules such as oil separation/stabilisation modules, fuel gas compression modules, gas lift, and injection compression modules.
Ezion will subscribe to 321,429 shares in Rotating Offshore Solutions for an aggregate consideration of SGD18 million (USD13 million).
In return, Ezion will issue Rotating Offshore Solutions 17.5 million new shares in Ezion at SGD1.0287 each.
DBS Vickers Securities analysts Yeo Kee Yan and Ling Lee Keng commented, “Rotating Offshore Solutions’s existing business is complementary to Ezion’s. It will create synergies to better support Ezion’s customers on their production support related activities in the offshore oil and gas industry. It will also place the two entities in a stronger position to compete with competitors and explore new growth opportunities.”
Yeo and Ling recommended Ezion’s stock and gave a 52-week target price of SGD1.50.