U.S.-based overseas assistance vessel proprietor Tidewater claimed Wednesday it had actually consented to get Swire Pacific Offshore Holdings Limited (SPO), a subsidiary of Swire Pacific Limited for around $190 million. Tidewater claimed the deal would certainly produce the sector’s biggest fleet of overseas assistance vessels with 203 vessels in total amount, consisting of staff watercrafts, yank watercrafts and also upkeep vessels.
“SPO’s fleet of 50 OSVs consists of 29 AHTS vessels and 21 PSVs; pro forma for the transaction, Tidewater will own a fleet of 174 OSVs, bringing Tidewater’s total fleet size to 203 vessels, including crew boats, tug boats and maintenance vessels,” Tidewater claimed.
The consolidated services will certainly run under the Tidewater brand name and also will certainly remain to be led by Tidewater CHIEF EXECUTIVE OFFICER Quintin Kneen.
Tidewater claimed that it had actually recognized considerable price harmonies of around $45 countless yearly run-rate price harmonies that will certainly be targeted post-completion of the deal.
“Tidewater will retain the strongest balance sheet in the industry, with approximately $110 million of cash on hand, full access to our existing undrawn $25 million revolving credit facility and financial flexibility under existing indentures,” the firm claimed.
“The transaction significantly enhances Tidewater’s presence in West Africa, provides for an expansion of its footprint in the rapidly growing Southeast Asia region and is additive to its footprint in the Middle East,” the U.S.-based overseas vessel proprietor included.
‘Recovery of OSV sector’
Quintin Kneen, Tidewater’s President and also Chief Executive Officer, claimed, “The acquisition of Swire Pacific Offshore marks another important milestone in the strengthening of Tidewater’s leadership position as we capitalize on the recovery in the OSV industry.
“I am excited to have acquired a high-quality fleet with a strong reputation in the maritime sector globally. I believe that the timing of this acquisition will allow Tidewater to capitalize on the continued improvement in the offshore supply vessel market, providing Tidewater with significant additional earnings and free cash flow generation potential as utilization and day rates continue to improve. All 50 acquired vessels are currently active and working throughout the world, allowing Tidewater to immediately leverage this new asset base.”
“We see a great deal of industrial synergies in acquiring this fleet and believe we will be able to rapidly integrate these vessels into the existing Tidewater shore base support infrastructure. Further, we believe that we will be able to realize significant synergies at both the G&A and operating expense level of approximately $45 million, from the current run rates, within 24 months from the close of the transaction.”
Doubling presence in West Africa
Kneen said, “The acquired fleet is primarily split among West Africa and Southeast Asia and Middle East. The addition of 25 OSVs in West Africa will nearly double Tidewater’s presence in the rapidly growing region, positioning it as the largest operator of active vessels in the region. Similarly, the addition of the SPO fleet in Southeast Asia and the Middle East positions Tidewater as the largest operator of active vessels across the entire region. The expansion of the Southeast Asia region, with 19 vessels currently operating, provides us with an opportunity to meaningfully participate in the oil and gas vessel market in the near-term and provides a platform with which to pursue offshore wind development expected to advance in the region.
Kneen added, “Following the financing transactions executed during the fourth quarter of 2021, the buyout of our joint venture partner in Angola, and now the SPO acquisition, we have executed a series of steps that have positioned Tidewater as the world’s leading OSV operator with the cleanest balance sheet in the industry. With our strong financial position, substantial available liquidity, experienced management team and efficient global operations, we are well-positioned to drive utilization and day rates with an expanded fleet of vessels, drive earnings and cash flow generation and pursue opportunities for additional strategic value accretive acquisitions.”
Terms of the offer
Under the regards to the deal, Tidewater claimed it would certainly provide 8,100,000 Jones Act warrants, each of which will certainly be at first exercisable for one share of Tidewater ordinary shares at $0.001 per share, plus a cash money repayment of $42 million.
“As of the day hereof, the warrants to be provided in the Transaction would certainly stand for, upon workout, roughly 15.6% of every one of Tidewater’s superior shares of ordinary shares and also existing warrants. The Jones Act warrants to be provided in the Transaction are non-voting, are not qualified to obtain any type of rewards or various other circulations, and also are or else structured to adhere to the international possession restrictions on the useful possession of Tidewater’s ordinary shares consisted of in the Merchant Marine Act of 1920, as modified,” the firm claimed.
The deal was with one voice accepted by Tidewater’s Board of Directors and also is anticipated to enclose the 2nd quarter of 2022.
