Canadian asset manager Brookfield Business Partners is spending around $750m to take a majority 60% stake in Teekay Offshore Partners, a subsidiary of Teekay Corp.
Brookfield will invest $610m to buy the stake in Teekay Offshore and will also acquire a $200m loan given by Teekay Corp to Teekay Offshore.
Following the transaction Teekay Corp will be left with a 14% stake in the offshore unit.
“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,” commented Kenneth Hvid, Teekay’s president and CEO.
“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,” said Cyrus Madon, CEO of Brookfield Business Partners.
J Mintzmyer, lead researcher at US-based Value Investor’s Edge, described the deal as “phenomenal”. Mintzmyer, who covers a range of North American maritime stocks, said the deal was one of the biggest shipping-related stories of the year to date. “The entire Teekay short thesis just got blown out of the water,” Mintzmyer told Splash today.