Tidewater announced a definitive agreement to acquire all of the outstanding shares of Swire Pacific Offshore Holdings Limited (SPO), a subsidiary of Swire Pacific Limited (HKSE: 0019.HK and 0087.HK), for approximately $190 million (the “Transaction”).
Strategic Rationale
• Creates industry’s largest fleet of OSVs: 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
• Significant cost synergies: Tidewater has identified approximately $45 million of annual run-rate cost synergies that will be targeted post-consummation of the Transaction
• Maintains balance sheet strength: pro forma the Transaction, 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
• Robust earnings leverage: acquired 50 OSVs provides a meaningful expansion of Tidewater’s asset base with which to drive earnings and free cash flow generation as the recovery in the offshore oil & gas market continues to unfold
• Fleet high-grading: adds 18 large PSVs and 10 large AHTSs to Tidewater’s fleet, with the age profile of large PSVs and large AHTSs improving by 0.6 years and 2.7 years, respectively
• Compelling valuation: SPO acquired at an attractive valuation compared to fleet appraised value, providing for asset-level value accretion
• Geographic enhancement and expansion: 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
Quintin Kneen, Tidewater’s President and Chief Executive Officer, commented, “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.”
Tidewater, headquartered in Houston, owns and operates one of the largest fleets of offshore support vessels in the industry, with more than 65 years of experience supporting offshore energy exploration, production, generation and offshore wind activities worldwide.
(Source: Tidewater – Image: Swire PSV Pacific Defiance)