According to Keppel’s release, GMG has a strong track record of contract renewals thanks to its “trusted long-term relationships with top tier customers” including telcos, hyperscalers and global equipment suppliers.
The release adds that the market for maintenance and installation services is poised to grow at a compound annual growth rate (CAGR) of 45% from 2023 to 2029 with the rising global demand for connectivity and the limited supply of specialised vessels.
GMG is also expected to maintain its high fleet utilisation of close to 100%.
“We are excited to complete this investment in GMG. It is a rare and unique opportunity to acquire a world-leading provider of subsea cable maintenance and installation services,” says Christina Tan, CEO of fund management & chief investment officer of Keppel Ltd.
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“This investment builds on Keppel’s digital infrastructure strategy which includes the Bifrost cable system, and now, GMG,” she adds. “With a substantial proportion of GMG’s business secured by long-term contracts with huge growth potential, especially in Asia, we are poised to deliver attractive risk-adjusted returns to our investors.”
Further to its statement, Keppel adds that the fund will “continue to evaluate quality deals and platforms beyond Asia, should such opportunities arise”.
The acquisition is not expected to have any material impact on Keppel’s net tangible assets (NTA) per share or earnings per share (EPS) for the current financial year ending Dec 31.
As at 10.26am, shares in Keppel are trading flat at $6.77.
