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Tidewater expands its global footprint amid anticipated offshore oil and gas market recovery.
Houston-based Tidewater (NYSE: TDW) has announced a definitive agreement to acquire all existing shares of Swire Pacific Offshore for approximately $190 million, creating the world’s largest fleet of offshore supply vessels (OSVs).
Swire Pacific’s fleet consists of 29 anchor handling towing vessels (AHTS) and 21 platform supply vessels (PSV), all active and working primarily in West Africa, Southeast Asia, and Middle East. The acquisition will bring Tidewater’s fleet to 203 total vessels, including 174 OSVs plus crew boats, tug boats and maintenance vessels.
“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,” said Quintin Kneen, Tidewater’s President and Chief Executive Officer. “All 50 acquired vessels are currently active and working throughout the world, allowing Tidewater to immediately leverage this new asset base.”
The transaction will significantly enhance Tidewater’s presence in West Africa, as well as provide for an expansion in the growing Southeast Asia market and adds to its presence in the Middle East.
“The addition of 25 OSVs in West Africa will nearly double Tidewater’s presence in the rapidly growing region, positioning it as the largest operator of active vessels in the region. Similarly, the addition of the SPO fleet in Southeast Asia and the Middle East positions Tidewater as the largest operator of active vessels across the entire region. The expansion of the Southeast Asia region, with 19 vessels currently operating, provides us with an opportunity to meaningfully participate in the oil & gas vessel market in the near-term and provides a platform with which to pursue offshore wind development expected to advance in the region,” added Kneen.
Tidewater will conclude the transaction with a strong balance sheet, with approximately $110 million of cash on hand and full access to an existing undrawn $25 million revolving credit facility.
“Following the financing transactions executed during the fourth quarter of 2021, the buyout of our joint venture partner in Angola, and now the SPO acquisition, we have executed a series of steps that have positioned Tidewater as the world’s leading OSV operator with the cleanest balance sheet in the industry. With our strong financial position, substantial available liquidity, experienced management team and efficient global operations, we are well-positioned to drive utilization and day rates with an expanded fleet of vessels, drive earnings and cash flow generation and pursue opportunities for additional strategic value accretive acquisitions,” said Kneen.
The transaction has been unanimously approved by Tidewater’s Board of Directors and is expected to close in the second quarter of 2022.
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