Making waves

Bhagwan Marine’s story begins in the salt-stained world of commercial fishing. Loui Kannikoski’s father emigrated to Australia from Finland, diving headfirst into the fishing industry in the early 1950s. He followed suit. Then a chance phone call 23 years later changed everything.

“We had the biggest cray boat on the west coast at the time,” Kannikoski tells The CEO Magazine. “I was contacted by one of the vessel suppliers to the oil and gas market – they needed a boat to stand in for one of theirs.

“So off we went up to the northwest of Western Australia and found out that cray fishing wasn’t the center of the universe after all. There was an entirely new industry we could tap into.”

This discovery sparked his decision to act, leading to the formal establishment of Bhagwan Marine in 2000. Beginning with only one single purpose-built vessel, the company grew by leaps and bounds. Just a little over a decade later in 2012, there were 130 vessels in the fleet and around a thousand employees.

“It was a mammoth growth period,” he recalls. “And around that time, we also sold 33 percent of the business to private equity to help us with the growth.”

However, Kannikoski says the surge didn’t last, and what followed was a sharp correction.

“We went into a downturn,” he admits. “We had to resize ourselves, which is really tough. We never expected it, but it taught us a lot.”

The experience reshaped the business. Then, in 2020, the company made another defining move – buying out its private equity partners and returning control to the family. Then, the Kannikoskis held a 90 percent stake in Bhagwan Marine.

Listing for longevity

With those lessons hard-earned, the next move was about building something that would last. In July 2024, Bhagwan Marine listed on the Australian Securities Exchange. Kannikoski is quick to frame the move not as an exit but a foundation.

“When we listed the company, the majority of people out there thought my wife and I were going to leave and go play golf or something,” he says with a laugh.

“But that wasn’t the reason at all. We listed the company to give it greater opportunity and for longevity, including its longevity after us.”

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“Bhagwan Marine is an exceptional organization to partner with. Principled, commercially astute and focused on long-term value. The company sets high standards, operates with clarity and fosters genuine collaboration. Bhagwan Marine’s disciplined approach and commitment to excellence have made our relationship both enduring and rewarding over more than two decades.” – Mike Cippitelli, Director, CPG

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The IPO enabled Bhagwan Marine to clear its debt entirely, strengthening its balance sheet ahead of what Kannikoski sees as a significant growth runway. Best of all, the company now holds the distinction of being Australia’s largest listed marine services business.

“We like to tell people that,” he says with a smile. “That designation gives us an opportunity for all kinds of things from acquisitions to organic growth – and also just getting better at what we do.”

The company is already doing quite the job, with annual revenue sitting pretty at approximately US$175 million. With a major acquisition now underway, that figure is set to climb sharply into the US$200 millions.

The deal of a lifetime

That major acquisition is with Riverside Marine – a 100-year-old Queensland-based business operating harbor towage and marine services across the country.

“When the CEO approached me in July last year, I was very surprised,” Kannikoski recalls. “He asked me to fly to Brisbane and meet with him. I was a little bemused at the request because he was very quiet about it all. But when I got there, he asked if I’d be interested in acquiring Riverside.

“As he puts it, once I picked myself up off the floor and realized the value of the opportunity, we went ahead.”

What followed was an intensive due diligence process conducted across the Christmas and New Year period. Riverside Marine brings with it approximately 20 managed tugboats and around 10 owned vessels. But perhaps most compelling is its contract base – 88 percent of the business is locked into long-term agreements.

“Normally, within the Bhagwan business, if we’re at a 50/50 level of contracts and spot market work, then that’s a really good mix,” Kannikoski explains.

“So to have an 88 percent long-term contracted business is really important. When we factor it in, we end up close to 60 percent long-term contracts. For shareholders, that means consistent revenue coming in every year.”

Kannikoski goes on to say that Riverside Marine will operate as a wholly owned subsidiary under its existing brand, with CEO Angus Campbell – a member of the founding family with 27 years in the business – continuing his role.

“The only thing that’ll change for 99 percent of the company is that the CEO of Riverside will now report to me,” he points out.

A family affair

For all of his ambition, Kannikoski is characteristically generous in sharing credit. His wife serves as General Manager of Corporate Services and, in his words, holds equal claim to the company’s success.

“She’s the real boss of the company,” he insists. “She’s built the business and certainly has as much responsibility for where we’re at.”

The family currently holds around 30 percent of the listed company, and Kannikoski sees no shortage of capable hands ready to take the business further.

“The future is really bright,” he says.

As for his legacy, he doesn’t want much.

“I just want to leave knowing that when we leave, we’ve created something that will get better without us and it’ll just go on,” he says.

“That would be a great thing – that we created something that can keep going.”