, Inc. and SEACOR Holdings Inc. announced that they have signed a definitive merger agreement. The Boards of Directors of both companies have unanimously approved the transaction. Under the terms of the merger 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% premium over Seabulk's closing share price on March 16, 2005 (based on SEACOR's closing share price of such date). 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 therefor. The aggregate equity value of the transaction is approximately $532 million, based on SEACOR's closing share price as of March 16, 2005. 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.
After giving effect to the transaction, the combined company will 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.
Charles Fabrikant, SEACOR's Chairman and Chief Executive Officer, explained the strategic reasons for the transaction: "The merger of SEACOR and Seabulk fits the goal of diversification we have outlined for several years in annual letters to shareholders. 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 harbor
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. The combined company will be one of only two providing complete global service.
"We are very excited to be able to announce this merger. Our goal for several years has been to find a well-run company with an experienced management team which has compatible businesses and a similar philosophy toward diversification.
"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 capitalization ratio will initially increase slightly, after giving effect to the transaction."
Gerhard Kurz, Seabulk's Chairman and Chief Executive, commented, "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."
The merger is expected to close by the end of the second quarter of 2005, subject to approval by Seabulk's stockholders of the merger and SEACOR's stockholders of the issuance of shares of SEACOR common stock in the merger, the receipt of certain regulatory approvals and the satisfaction of customary closing conditions, in accordance with terms of the merger agreement.
As part of the transaction, entities associated with DLJ Merchant Banking Partners III, L.P. and Carlyle/Riverstone Global Energy and Power Fund I, L.P., who collectively own approximately 75% of Seabulk's common shares, have entered into an agreement to support the transaction.