SINGAPORE (May 18): Union Steel Holdings, one of the largest metal recycling companies in Singapore, has entered into a sale and purchase agreement to acquire the Transvictory group of companies consisting of Transvictory Holdings, Transvictory Winch System, and Steadfast Offshore & Marine, for $15 million.

Transvictory is a provider of products and engineering services, mainly involving winches, cranes, and deck equipment, to the offshore and marine industry.

The agreement marks Union Steel’s first foray into the offshore and marine industry – through which the group intends to tap on the strength of Transvictory’s existing customer networks and relationships, as well as potential operational synergies that could be harnessed between Transvictory and the group.

“Although Transvictory deals with the oil and gas sector which is also going through tough times, this has also resulted in a fairer valuation of their assets, which presents a compelling value proposition as they have strong balance sheets,” says Union Steel Executive Chairman and CEO Ang Yu Seng.

“We see the potential recovery for a recovery of their earnings when the oil and gas market stabilises.”

Upon completion of the acquisition, Transvictory will contribute an additional $15 million to the group’s net asset value. As at end March, Union Steel had cash and cash equivalents of $28.3 million, and a net gearing level of 18.6%.

Union Steel is trading 4.7% higher at 45 cents as at 10.51am.