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SEACOR and Seabulk Announces Merger Agreement
Seabulk and SEACOR have signed a definitive merger agreement, under which the combined company intends to be a leader in world-wide offshore support services, domestic Jones Act tankers, domestic helicopter services to the offshore oil and gas industry, domestic inland river barge transportation, environmental services, and domestic harbor tugs.
Additionally, the companies have investments in international product tankers and dry bulk shipping.
“The merger of SEACOR and Seabulk fits the goal of diversification we have outlined for several years in annual letters to shareholders,” explained Charles Fabrikant, SEACOR’s Chairman and Chief Executive Officer.
“Both SEACOR and Seabulk have achieved leadership positions in different asset-based transportation service businesses. The combination will create a balanced portfolio of assets, focused on five different business niches. Seabulk’s position in the U.S. tanker business, with its business template of multi-year contracts, and the harbour tug business are a good balance to the offshore vessel sector, the helicopter business, and the inland river barge business.”
“This combination is also complementary for both companies’ offshore operations. SEACOR’s fleet and its recent capital commitments have been primarily focused on equipment in the U.S., serving the deep-water exploration industry; Seabulk's recent investments have been focused on its international fleet.
Seabulk’s operations in Brazil and the Arabian Gulf and SEACOR’s operations in the North Sea, along with the operations of both companies in Mexico, Asia, and West Africa, provide flexibility in serving customers.
“We expect this transaction to be accretive to our shareholders, both in terms of earnings and cash flow. We anticipate that SEACOR's total debt to total capitalisation ratio will initially increase slightly, after giving effect to the transaction.”
Gerhard Kurz, Seabulk’s Chairman and Chief Executive, commented on the merger stating that the merger with SEACOR creates a unique opportunity to effectively combine the financial, operational and management resources of two successful maritime companies for enhanced future growth.
“We are very optimistic that the resultant synergies, strengthened businesses and improved access to capital will generate substantial benefits for both our customers and shareholders,” he added.
Under the agreement, Seabulk's stockholders will, subject to limited adjustments, receive 0.2694 of a share of SEACOR common stock plus cash of $4.00 for each issued and outstanding share of Seabulk common stock, which represents a 29 per cent premium over Seabulk's closing share price on March 16, 2005.
In certain circumstances, the portion of the merger consideration payable in cash may be reduced and shares of SEACOR common stock, having a value on the closing date equal to the cash reduction, may be substituted therefore.
The aggregate equity value of the transaction is approximately $532 million, based on SEACOR's closing share price as of March 16th. In addition, approximately $471 million in net debt obligations will be assumed by SEACOR.
The transaction is expected to be tax-free to Seabulk stockholders, other than with respect to any cash received.
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