OFFSHORE oil and gas contractor Dyna-Mac has signed a share purchase agreement to acquire all the total issued and paid up share capital in Exterran Offshore, for a consideration of US$8.25 million, it said in a Wednesday (Jan 3) bourse filing.

The aggregate cash consideration was decided mainly based on consideration of the land and building value.

With the acquisition, Dyna-Mac will secure access to Exterran’s Offshore yard facilities of about 4.5 hectares along Gul Road, which will provide additional fabrication capacity for the group’s current and future projects.

The group will thus be able to take on larger projects more complex modular construction work, and jobs that involve hydrogen and ammonia piping, said the mainboard-listed company.

The group would also have lower costs and higher productivity and product quality, as the additional workshops gained in the acquisition would allow it to consolidate piping fabrication, reducing the need for outsourcing and rentals, Dyna-Mac said.

It added that buying Exterran Offshore – located beside Dyna-Mac’s main module assembly facility at Gul Road – also complements its ongoing strategic reorganisation of its facilities.

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The new site, whose lease expires in 2030, would extend Dyna-Mac’s total waterfront length on the road to more than 680 metres, allowing it to “improve on its current method of construction via split modules, shortening time to deliver projects, as well as providing an option to work on cable manufacturing and modules for the pharmaceutical sector”.

As at Dec 31, 2023, the net tangible asset value and net book value of Exterran Offshore is US$3.65 million, Dyna-Mac said, adding that as at Aug 2023, the land and building Exterran Offshore owned was valued at S$17 million.

The acquisition is not expected to have a material impact on Dyna-Mac’s net asset value and net profits for the financial year ending Dec 31, 2024.  

The strategic acquisition “underscores (Dyna-Mac’s) commitment to opportunistic value creation, and creates a multitude of synergies and opportunities for the group”, said its chief executive officer Lim Ah Cheng.

The counter closed down S$0.02 or 5.8 per cent at S$0.325 on Wednesday, before the announcement.