Hornbeck and Helix to Merge in Further Consolidation in the Offshore Sector
Hornbeck Offshore Services and Helix Energy Solutions Group announced that they have agreed to merge their businesses to form a more integrated global offering in the offshore sector. It is the latest in a series of large deals consolidating the industry.
The terms call for an all-stock deal that will combine the two companies and create what they say will be a more integrated service offering across a global platform. Hornbeck Offshore Services will be the surviving company, listed on the New York Stock Exchange and led by Todd Hornbeck as President and Chief Executive Officer. Hornbeck shareholders will own approximately 55 percent of the combined company, and Helix shareholders will hold approximately 45 percent of the shares.
“In merging two proven industry leaders with industry-leading teams, assets, and offerings, this transaction creates a global deepwater vessel and services company with the scale and capabilities to deliver sustainable, long-term growth,” said Owen Kratz, President and Chief Executive Officer of Helix.
The companies point to their similarities, as both are focused on the deepwater sector but with different specializations and global focuses. Combined, they said they will create a more diversified and expanded high-specification fleet of specialty vessels, supported by subsea robotics, well intervention, and technical service capabilities, including trenching subsea pipelines and cables. They said the new company will be growth-oriented, focusing on deepwater energy, defense, and renewables industries.
While each company’s operation focuses on deepwater, Helix has a global presence in West Africa, Asia Pacific, and the North Sea regions, as well as the United States and Brazil. Hornbeck has been focused on the Americas, including Brazil and Mexico.
Helix is best known for its well intervention operations. It has seven well intervention vessels, six ROV support vessels, 20 shallow water abandonment vessels, ROVs, robotics, and the support systems. Hornbeck lists more than 70 offshore support vessels in its fleet on its website. Its specialty and ultra-high specification OSV fleet is contracted to the energy industry as well as the U.S. government, offshore wind, and other non-oilfield customers.
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Management cites the opportunity to become a more integrated service provider offering end-to-end solutions as well as expanding its geographic reach. They expect to generate $75 million or more in annual revenue and cost synergies within three years following the combination. Combined, it will be a $4 billion company.
Key shareholders of Hornbeck, including Ares Management, have issued commitments to the transaction, which will require the approval of the shareholders and applicable regulatory approvals. They expect to complete the merger in the second half of the year.