Asset management firm Brookfield Business Partners has agreed to purchase a stake of 60% in Bermuda-based Teekay Offshore Partners for nearly $750m.
A subsidiary of Teekay Corporation, Teekay Offshore is a global provider of marine services and solutions focused on production and logistics to the offshore oil sector. Its operations are mainly focused on the offshore oil regions of the North Sea, Brazil and the Eastern Canadian coast.
Its consolidated assets have a value of $5.6bn while its fleet comprises 62 offshore vessels.
Brookfield Business Partners CEO Cyrus Madon said: “Teekay Offshore has established itself as a global leader in the provision of marine services to the offshore oil production industry.
“Our investment represents an opportunity to acquire a high quality, highly contracted business with presence in attractive markets, and we look forward to supporting Teekay Offshore with its continued growth.”
The transaction is subject to regulatory approvals among other customary conditions, and is anticipated to close in the third quarter.
Under the deal, Brookfield has agreed to invest $610m in exchange of newly-issued common units of Teekay Offshore and will purchase a $200m loan from Teekay Corporation for Teekay Offshore at discount to par.
The Bermuda-based Brookfield will also buy a stake of 49% in Teekay Offshore GP (TOO GP), the general partner of Teekay Offshore. Teekay on the other hand will retain its stake of 51% in TOO GP.
As part of the deal, Brookfield has the option to raise its stake in TOO GP by an additional 2% subject to meeting of certain conditions.
Teekay president and CEO Kenneth Hvid said: “The combination of Teekay’s operational platform and Brookfield’s global business platform and access to long-term capital is a complementary fit and creates one of the world’s strongest offshore marine infrastructure companies.
“Out of the range of alternatives evaluated, we believe this comprehensive solution represents the best possible outcome for all of our long-term stakeholders and positions Teekay Offshore to benefit from an energy market recovery.”