Case Study

Purus Marine Pre-Purchase Due Diligence

In January 2022, Purus Marine contracted Offshore Engineering Solutions (OES) to complete 24 vessel technical inspections and a commercial review, as part of a pre-purchase due diligence package.

Purus Marine, a maritime holding company, contracted OES during the initial stages of a potential acquisition of HST Marine (HST), a UK-based owner and operator of offshore vessels.

OES was responsible for conducting a range of vessel inspections, a shore-based systems review, a bespoke market report, a commercial review, an evaluation of business systems and operational performance, and a desktop 360 assessment of HST.

The Requirement

Purus Marine required a highly experienced and trusted 360º support agency, offering both technical and commercial expertise, to provide a reliable and thorough inspection and commercial review package.

With more than 15 years of experience within the offshore wind vessel market, and a trusted team of technical and commercial experts, OES was the ideal fit for this vital scope of work.

The Scope

Pre-Purchase Inspections

The project commenced with OES assembling their team of highly-qualified vessel auditors to conduct the pre-purchase inspections of HST’s current crew transfer vessels (CTV), survey vessels, multicats and RIBs.

Despite only six weeks in which to complete all 24 vessel inspections, with HST’s fleet spread across five countries, OES mobilised their team within days, ensuring each inspection could be carried out without any impact to operations.

As a complete picture of each asset’s current condition and capabilities was paramount, each vessel inspection’s scope of work involved more than twenty sections. Each inspection included, but was not limited to, an audit of the vessel’s statutory certificates, a visual inspection of the vessel’s machinery and Planned Maintenance System (PMS) for outstanding items, and an unrecorded vessel damage and repair inspection (per class records and PMS).

New Build Inspection

OES visited Diverse Marine’s shipyard in the Isle of Wight to validate the build quality and progress of new build CTV, HST Frances.

With almost two decades of experience in offshore wind vessel build management, OES’ tried-and-tested process ensured a comprehensive inspection including validation of progress to program, an inspection of major equipment ordered and present on-site, and a review of cost of build contract vs delivered costs.

Shore Based Systems Review

By utilising OES’ systems audit expert – who has a strong track record of fleet operations excellence over their decade-long career – OES were able to undertake a desktop review of HST’s Integrated Management System (IMS).

The IMS desktop review included items from the International Safety Management Code (ISM) as well as ISO 9001, 14001 and 45001. HST’s HSE performance was also reviewed, and a compliance check and detailed finding report was issued to Purus Marine.

Charter Party, Contract Review & Desktop Valuation

To ensure a complete 360º view of HST’s income stream, OES conducted a commercial review of all achieved and pipeline charters, and a desktop vessel valuation of the existing fleet, which noted similar vessels sold within the market.

With the support of sister company, CSO Shipbrokers, OES provided a rate review and market average scoring based on duration (firm and options), charter, and vessel type. Purus Marine was also provided with notable points within the BIMCO / Charter Party and individual vessel valuations.

Market Position, Overview and Forecast Report

OES produced a bespoke market report which included a detailed analysis of HST’s market position, including the company’s score against the industry’s top 10 operators and HST’s days of charter per vessel vs competitors.

In addition, OES provided Purus Marine with HST’s market posting overview by customer base, and a comparison of HST’s CTVs and other major assets against competitors’ vessels.

Offering Purus Marine a clear understanding of HST’s market growth potential, OES provided a detailed CTV market overview report which included an evaluation of market trends and estimated requirements for the future, as well as a European fleet overview including current vessels and new builds.

Business Operations and Commercial Performance

OES conducted an exhaustive evaluation of HST’s business systems and operational performance. This included reviewing HST’s business plan and producing a summary report of areas of weakness and recommendations for growth/improvement.

HST’s commercial performance was analysed, including bid win/loss ratio and contract win/loss rationale.

OES also delved into a deep analysis of HST’s vessel financials including individual vessel budgets, budget vs spend, vessel CAPEX spend review and critical stock holding for each vessel.

Additionally, OES reviewed HST’s business systems including their Vessel Management Platform, as well as the company’s HR processes and pay and retention rates.

Desktop 360º Assessment

The final scope of work involved a full 360º analysis of HST’s key areas including vessel performance, health, safety, and environment (HSE), commercial activities, and shoreside support. 

Drawing on the diverse experience of OES’ team, the comprehensive assessment covered everything from technical availability to commercial attractiveness, as well as HSE observations. 

This section of the overall scope also included a customer engagement survey, which gave valuable insight into areas of strength, as well as those requiring improvement. 

The Team

OES’ provided a team consisting of the following in order to complete this scope of work: Marine Surveyor, IMS Auditor, HSE Auditor, Jnr Broker, Broker, Senior Broker (C-Level), Renewables Maritime Expert (C-Level), Maritime HR Professional, IT Systems Analyst and an Administrator.

“The vital work Offshore Engineering Solutions conducted helped enable us to make an informed decision regarding the acquisition of HST Marine.

Despite a tight timeline, the Offshore Engineering Solutions team ‘pulled it out of the bag’ and it was a pleasure to work with them on this important scope of work.”

ALASTAIR​ MCDONALD CHIEF CORPORATE DEVELOPMENT OFFICER PURUS MARINE

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