Bhagwan to buy Programmed fleet

Geraldton company Bhagwan Marine is set to expand its presence in northern Australia after striking an agreement to purchase a fleet of vessels for $25 million; a third of the price the previous owner paid just three years ago.

Bhagwan will take ownership of the fleet of 24 vessels through the acquisition of Programmed Maintenance Services' Darwin-based subsidiary Broadsword Marine Contractors, which was previously owned by Skilled Group before the merger with Programmed last year.

Skilled picked up Broadsword for $75.5 million in 2013, coincidentally in the same week Bhagwan acquired Northern Territory marine services business Workboats Northern Australia for an undisclosed amount.

Bhagwan managing director Loui Kannikoski said the acquisition was a great deal for the company and another key step in its growth strategy.

“The favourable terms of this agreement allows Bhagwan to further consolidate our position as the leading marine services provider supporting the oil and gas, resources and construction industries throughout Australia,” Mr Kannikoski said.

Bhagwan Marine won Business News' Rising Stars award for fast-growing private companies in 2013, one year after private equity group Catalyst Investment Managers invested in the company. 

It has pursued growth and diversification since then, and now has offices and support facilities at 12 locations in WA, the Northern Territory, Queensland and the UK.

Programmed said while it remained committed to providing marine and offshore manning, catering and logistic services, the current trading performance of Broadsword has weakened.

“This transaction will remove the risk of further volatility in earnings,” Programmed said.

“Payment terms for the transaction are spread over two years. Proceeds from the sale will be used to retire debt.”

The deal excludes the sale of one remaining vessel.

Programmed shares were 1.7 per cent lower to $2.24 each at 11:45am.