Tidewater Announces the Acquisition of 37 Platform Supply Vessels from Solstad Offshore
10.03.2023 HOUSTON--(BUSINESS WIRE)-- Tidewater Inc. (NYSE: TDW) (the “Company”) today announced a definitive agreement to purchase 37 of Solstad Offshore ASA’s (“SOFF”) platform supply vessels (“PSV”) for $577 million (the “Transaction”).
Solidifies Tidewater as the leading high-specification PSV operator: The addition of 37 PSVs makes Tidewater the largest owner and operator of high-specification PSVs, which is the OSV vessel class that has demonstrated the highest utilization through all market cycles
Enhances Tidewater’s position as the leading global OSV operator with a world-class fleet: Tidewater’s total fleet of 228 vessels is among the youngest in the world, and features a modern fleet of 199 PSVs and AHTS with an average age of 11.3 years, 65% of which are high-specification vessels
Creates the world’s largest hybrid fleet: The combined fleet will include 14 battery hybrid and 2 LNG power capable vessels and will be able to leverage Tidewater’s emissions reduction and fuel optimization technology, further demonstrating Tidewater’s commitment to sustainability
Platform for cash flow generation: The acquired vessels have total backlog of approximately $620 million (including contract option periods) and significant potential cash flow generation upside as maturing contracts roll onto higher market day rates
Quintin Kneen, Tidewater’s President and Chief Executive Officer, commented, “This agreement to acquire 37 PSVs from Solstad Offshore marks yet another important milestone in the strengthening of Tidewater’s leadership position as we continue to capitalize on the rapidly improving OSV market. This acquisition further solidifies Tidewater as the leader in large, high-specification PSVs and as the new global leader in hybrid PSVs.
“These vessels make up the highest specification PSV fleet of its size anywhere in the world. All 37 vessels are currently active and are working throughout the world, principally in the North Sea, but also in Brazil, Australia and West Africa.
“Assuming the transaction closes at the end of the second quarter, we are updating our revenue guidance for 2023 to approximately $1.03 billion and our vessel operating margin guidance for 2023 remains the same at approximately 50.0%.
“This transaction is just the latest in a series of transformative steps Tidewater has taken to drive long-term earnings and cash flow generation. We are focused on bringing together the world’s best OSV fleets to create the safest, most sustainable, most reliable, most profitable high-specification OSV fleet in the world.”
Tidewater intends to fund the Transaction through a combination of new debt and cash on hand. The Company has received commitments from a group of financial institutions, led by the Company’s existing lender DNB Bank ASA, for a three-year senior secured credit facility of up to $325 million, and expects to raise new debt prior to closing of the Transaction. Closing of the Transaction is subject to customary regulatory approvals and includes a financing contingency. The closing of such financing is subject to agreement on satisfactory documentation and the negotiation and satisfaction of customary conditions precedent.
The Transaction was unanimously approved by Tidewater’s Board of Directors and is expected to close in the second quarter of 2023.