The Hindu Business Line : Sterling Infotech Group co acquires J.B. Ugland Shipping for Rs 1,200 cr

Chennai, Feb. 19 Siva Ventures Ltd, the flagship company of the $2-billion Chennai-based Sterling Infotech Group, has acquired the Norwegian shipping firm J.B. Ugland Shipping AS (JBUS), from J.B. Ugland Holding AS, for a total consideration of around $300 million (Rs 1,200 crore), according to a press release.

The acquisition will propel the Sterling Group’s business plans within the shipping and logistics industry. The all-cash deal was funded through a combination of debt and equity. JBUS will become a subsidiary of the group, Mr Srinivasan Vaidyanathan, Group CEO, Sterling Infotech Group, told Business Line.

Fleet strength

JBUS has a fleet of 40 owned and long-time chartered vessels with an aggregate capacity of around 2 million dead weight tonne. The fleet consists of a mix of tankers, chemical carriers and bulk carriers. The fleet, with average life of around four years, includes operational vessels and a new building programme with the vessels to be delivered in phases over the next three years, said the release.

As part of the transaction, the incumbent management of JBUS, led by its CEO Mr Bjorn Bergsland, will continue to manage the company. The company has the rights to use the brand name of JBUS for three years and will continue trading under the J.B.Ugland name following the acquisition, the press release said.

JBUS’ operations are centred in Norway and in Singapore, where JBUS’ main operating subsidiary J.B. Ugland Shipping Singapore is an Approved International Shipping company. The company is likely to report revenues of $150 million during the current fiscal, Mr Vaidyanathan said.

Mr Sivasankaran, Group Chairman, Sterling Infotech Group, commenting on the rationale behind the entry into the shipping industry said: “I believe that the shipping industry, especially the bulk commodities segment — both tankers and dry bulk carriers — will increasingly revolve around the broader Asian commodities story. In particular, the bulk shipping tonnage demand from India is likely to see explosive growth on the back of the increased raw material demand for the new power and oil refining projects coming up in India, a large number of which are based on imported raw materials.

Standard Chartered Bank advised Siva Venture on the acquisition, and JBUH was advised by Pareto, a leading Norwegian investment bank, the release said.

More Stories on : Mergers & Acquisitions | Shipping | Software

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