Helix Energy Solutions Group, Inc. has announced that it has entered into a definitive agreement to acquire 100% of the equity interests of the Alliance group of companies for US$120mn million cash at closing, plus the potential for post-closing earnout consideration.
Alliance is a Louisiana-based privately held company that provides services in support of the upstream and midstream industries in the Gulf of Mexico shelf, including offshore oil field decommissioning and reclamation, project management, engineered solutions, intervention, maintenance, repair, heavy lift and commercial diving services.
Helix said that the transaction aligns with its ‘Energy Transition’ business model, by expanding its decommissioning presence in the Gulf of Mexico shelf and advancing Helix’s ESG initiatives by responsibly supporting end-of-life requirements of oil and gas projects.
The transaction also augments Helix’s decommissioning and life-of-field maintenance service capabilities through the addition of Alliance’s comprehensive shallow water assets, including a fleet of Jones Act-compliant lift boats, offshore supply vessels, a heavy lift derrick barge and diving vessels, as well as plug and abandonment systems, coiled tubing systems and snubbing units.
The deal further positions Helix to further penetrate the North American decommissioning market, with published reports forecasting nearly US$3bn of decommissioning expenditures between 2022 and 2025, and the potential to expand into the global market. Based on the assets being acquired, the parties’ assumptions and market conditions, and anticipating Alliance's potential annual EBITDA in excess of US$30-40mn, the transaction is expected to add accretive free cash flow and diversify Helix’s asset base and revenue stream, at an attractive valuation.
According to Helix, the deal will help in preserving a strong financial position and liquidity, as Helix’s pro forma cash, liquidity and net debt would approximate US$145mn, US$186mn and US$119mn, respectively. The transaction is also expected to enhance the financial performance outlook, with expected continued improvements in free cash flow resulting in expected strong liquidity and leverage position.
Owen Kratz, Helix’s President and Chief Executive Officer said, “Based on a number of markets and regulatory drivers and our current expectations, we fully believe that the offshore oil and gas decommissioning market will grow significantly in the near term. This acquisition complements Helix’s present deepwater abandonment offerings by adding shelf and facility abandonment capabilities and significantly enhances our position as a full-field abandonment services provider, both in the Gulf of Mexico and globally. We also see possibilities to expand our opportunities within our existing late-life production business.”
Steve Williams, owner of Alliance said, “Our recent successes in acquiring and developing businesses and assets to establish Alliance as an offshore shallow water energy services company has led us to Helix, who we see as the industry standard in deepwater energy services.”
The acquisition is expected to close in mid-2022 and is subject to regulatory approvals and other customary conditions.