International Shipholding Corporation (NYSE: ISH) announced Thursday that it has entered into an agreement to acquire a 100% ownership of U.S. United Ocean Services, LLC (UOS), a wholly-owned subsidiary of United Maritime Group (UMG), for approximately $111 million in cash.
Founded in 1959, UOS operates the largest fleet of U.S.-flagged dry bulk carriers operating under the Jones Act with two handysize bulkers and four tug/barge units totaling 131,000 DWT. The fleet operates under long-term contracts with Tampa Electric (TECO) and The Mosaic Company (Mosaic), both of whom have maintained longstanding relationships with UOS that have spanned several decades.
Th acquisition will provide Mobile, Alabama based ISH with increased scale and a more diverse product offering within the U.S. Flag Jones Act dry bulk transportation market, where ISH maintains a strong position.
Mr. Niels M. Johnsen, ISH’s Chairman and Chief Executive Officer, stated, “We are pleased to acquire United Ocean Services from United Maritime Group, a leader in dry bulk coastwise transportation in the United States for over 50 years. This acquisition enables management to capitalize on a growth opportunity in a niche market that is expected to be accretive to both earnings and free cash flow. The addition of these vessels strengthens our presence and improves our operating efficiencies in the U.S. Flag Jones Act dry bulk market. Additionally, we anticipate that this transaction will increase our contracted revenue stream to approximately 68% of total revenue in 2013.”
ISH plans to operate UOS as a separate subsidiary out of Tampa, Florida, while retaining its current management team.
The transaction is expected to close in the fourth quarter of 2012, subject to receipt of applicable regulatory clearances and satisfaction or waiver of other customary closing conditions.