Maritime Partners to Takeover AMSC Jones Act Tanker Business in $747M Deal
AMSC based in Norway has decided after 18 years to move on to new projects in the shipping industry announcing that it has entered into an agreement to sell its ten Jones Act tanker operation to a newly formed company that will be managed by Louisiana-based Maritime Partners. The company emphasized the profitability of the fleet saying the move was part of an effort to “reconsider capital allocation” and strategy going forward.
Formed in 2005 as American Shipping Company, management highlighted it is 18 years since the tankers were ordered and later placed in service. The company has nine handysize product tankers (each 45,800 dwt) built by Aker Philadelphia (now Philly Shipyard) and one handysize shuttle tanker. All the vessels operate under long-term bareboat charters to Overseas Shipping Group or Keystone Shipping Company. The vessels are engaged in the Jones Act market with the charters running to 2025 and with nine under option for extensions ranging to between 2027 and 2029.
"The acquired vessels are critical long-lived assets engaged in the transportation of non-discretionary cargo throughout the United States,” said Bick Brooks, the co-founder and Chief Executive Officer of Maritime Partners. “This acquisition will nicely complement our existing lease portfolio by diversifying lessee exposure, asset exposure, and end market exposure within the protected Jones Act markets.”
Maritime Partners was founded in 2015 as a maritime finance company and is heavily involved with the Jones Act trade. The company reports a fleet of approximately 1,800 vessels, including pushboats, towboats, and a variety of barges, such as hopper barges and tank barges, mostly involved in the U.S. inland market.
Under the terms of the agreement, the tanker operation will be acquired by a new company managed by Maritime Partners. The transaction reflects an enterprise value of $746.7 million for the tanker operation, with AMSC to receive $249.3 million in cash and the repayment of a shareholder loan. The consideration represents a premium to the current implied trading value and a valuation that is 2.4 times the book equity of the company.
The deal is subject to AMSC shareholder approval. They noted that Aker Capital and DNB Bank, the two largest shareholders of AMSC holding in aggregate just over 34 percent of the shares, have agreed to vote in favor of the transaction. They expect to complete the transaction by October 31.
AMSC will continue to own the Normand Maximus, a subsea construction vessel, operating on a bareboat contract to Solstad Offshore. AMSC reports it intends to continue to grow within the maritime ship owning and ship leasing market. They will seek attractive risk/reward projects offering solutions to operators in shipping and offshore markets.