The following is text of a news release from PRNewswire:
(HOUSTON) — Tidewater Inc. and GulfMark Offshore Inc. on Monday announced that the boards of directors of both companies have unanimously approved a definitive agreement to combine the two companies. This combination, if consummated, will create a global offshore support vessel leader positioned to capitalize on significant cost synergies and superior growth opportunities as the OSV sector recovery gains traction.
Under the terms of the all-stock agreement, GulfMark stockholders will receive 1.100 shares of Tidewater common stock for each share of GulfMark common stock held by them. Each GulfMark noteholder warrant will be automatically converted into the right to receive 1.100 Tidewater shares, subject to Jones Act restrictions on maximum ownership of shares by non-U.S. citizens. Collectively, these GulfMark security holders will beneficially own 27 percent ownership of the combined company after completion of the combination, or 26 percent on a fully diluted basis. Total value to these GulfMark security holders is approximately $340 million and the equity market capitalization of the combined company is approximately $1.25 billion, both based on the Tidewater closing stock price of $30.62 on July 13, 2018.
Concurrent with the closing, $100 million of existing GulfMark debt is expected to be repaid. On a pro-forma basis, Tidewater will maintain its industry-leading position of financial strength, with pro forma net debt of approximately $100 million and pro forma available liquidity of more than $300 million. Tidewater will assume GulfMark's obligations under existing GulfMark equity warrants ($100 strike price).
The combined company will have the industry's largest fleet and the broadest global operating footprint in the OSV sector. The financial strength and operating footprint of the combined company will also position it to sustain through-cycle market leadership.
The combined company will be operated under the Tidewater brand and will be led by Tidewater CEO John Rynd. Upon the closing of the combination, the Tidewater board of directors will be expanded to ten seats by adding three directors selected by GulfMark. The transaction is expected to close in the fourth quarter of 2018, subject to customary closing conditions, including stockholder approval of the merger (by GulfMark's stockholders) and of the share issuance (by Tidewater's stockholders).
"By combining our fleets and shore-based activities we will be better able to provide customers with access to modern, high-specification vessels while maintaining a strong commitment to safe operations and superior, cost-effective customer service," said John Rynd, Tidewater president and CEO. "The transaction preserves Tidewater's strong financial profile and allows the company to fund both organic growth and possible additional acquisitions."
"At GulfMark, we have been longstanding advocates for consolidation of the OSV industry," said Quintin Kneen, GulfMark president and CEO. "This transaction is an important first step in that process. The combined company will be better positioned to build upon GulfMark's strong track record in the recovering North Sea region. The combined company's global operating footprint also provides scope for significant scale-based economies and improved utilization of our fleet by redeploying under-utilized vessels across the combined company's broader operating footprint."
