Investment firm KKR is to invest $400 million into subsea cable laying firm OMS.
The company over the weekend announced the signing of definitive agreements under which KKR will commit the amount in “a tailored solution” for OMS Group.
KKR said its investment “positions OMS Group well to accelerate its growth,” including through expanding its fleet size and capabilities and investing in cable landing stations and subsea cable routes.
News of the deal first surfaced last week. The transaction is expected to be completed by Q1 of 2024.
Projesh Banerjea, director, infrastructure at KKR, said: “OMS Group has established itself as a market leader with a longstanding track record of success and growth in Southeast Asia. Our tailored solution for OMS Group also creates strong adjacencies with KKR’s recent digital infrastructure investments and builds on long-term secular tailwinds in the region, including increased data consumption, enterprise cloud needs, a focus on digitalization by governments, and a booming digital economy.”
KKR is making this investment primarily from its Asia infrastructure strategy. Past KKR investments in the region have included the regional data center platform of Singtel and Pinnacle Towers.
Datuk Soon Foo Lim, OMS Group’s chairman, said: “OMS Group and KKR share the same vision and appreciation of the critical data infrastructure OMS Group builds and maintain for its clients. We look forward to working with David Luboff, Projesh Banerjea, and the world-class KKR team in advancing OMS Group’s growth plans.”
Founded in 1983, Optic Marine Group is based in Selangor, Malaysia. The company provides subsea cable installation and maintenance. The company's CS Lodbrog ship landed the Natitua Sud cable in French Polynesia in April this year and is handling the installation of an upcoming domestic subsea cable connecting east and west Australia.
Currently, OMS operates six cable laying and repair vessels – the most recent, the CS Cable Vigilance, launched last year – as well as two barges and three tug boats.
Bloomberg had previously reported the Malaysian company had been weighing a listing in Kuala Lumpur as soon as this year with the aim to raise as much as $300 million.
Ronnie Lim, group CEO, OMS Group, said: “KKR’s investment in OMS Group underscores the value of OMS Group’s capabilities, which provides immense economic value to communities, corporations, and countries around the world by constructing and maintaining critical subsea data infrastructure. Together with KKR’s strong track record in supporting and investing in data infrastructure assets and its platform-building expertise, OMS Group is in a stronger position to support its clients to build and maintain greater global connectivity.”
Cable ships are few and far between. According to the ISCPC, there are around 60 cable ships in operation, many of which are over 30 years old. With more than 400 subsea cables running and demand increasing, a limited supply of vessels can delay project and slow repairs.