November 28, 2006
Maritrans now OSG America, Inc.
Overseas Shipholding Group, Inc. (NYSE: OSG) and Maritrans Inc. (NYSE: TUG) jointly announced today that OSG has completed the acquisition of Maritrans Inc., a leading U.S. Flag crude oil and petroleum product shipping company that owns and operates one of the largest fleets of double hull Jones Act vessels serving the East and U.S. Gulf coastwise trades.
The acquisition followed the definitive merger agreement between the companies announced on September 25, 2006. At a special meeting of stockholders of Maritrans held earlier today in Philadelphia, stockholders holding greater than a majority of Maritrans' outstanding shares approved and adopted the merger agreement.
Following vote and in accordance with the merger agreement, Maritrans was merged with a wholly-owned subsidiary of OSG, and each outstanding share of Maritrans' common stock was converted into the right to receive $37.50 per share in cash.
The transaction is valued at $471 million.
Maritrans will be renamed "OSG America, Inc."
As a result of the combination, OSG's U.S. Flag fleet now totals 35 operating and newbuild vessels that include handysize product carriers, a car carrier, dry bulk carriers and articulated tug barges.
OSG's U.S. Flag fleet provides U.S.-based companies with a broad range of short-haul and long-haul transportation and lightering services. The strategic acquisition also gives OSG a presence in all four major U.S. trading routes; intra U.S.-Gulf, U.S. Gulf to the East Coast, U.S. Gulf to the West Coast and the Alaskan North Slope trades.
Morten Arntzen, President and Chief Executive Officer of OSG, commented, "We view having a leading presence in the Jones Act trade as integral to our long-term strategy of growth and diversification."
"The predominantly medium and long-term nature of U.S. Flag revenues support our balanced chartering strategy, thus enhancing the stability of OSG's future earnings overall," stated Myles Itkin, Executive Vice President and Chief Financial Officer of OSG. "Additionally, OSG derives substantial economic benefit by being able to apply its CCF fund to this transaction."
Jonathan P. Whitworth, 39, appointed Senior Vice President of OSG and Head of the U.S. Flag Strategic Business Unit in conjunction with the transaction, commented, "Since 1998, Maritrans has been actively engaged in a double-hull rebuilding program aimed at ensuring that its Jones Act fleet is 100% compliant with the U.S. Oil Pollution Act of 1990. Maritrans' patented barge rebuilding process allows articulated tug barges to be converted at a significant cost advantage. The rebuild and newbuild programs of the newly combined company comprise thirteen vessels, including the Overseas Houston, which will be delivered next month and has been chartered to Shell, and the articulated tug and barge unit, the Overseas Vision and M350, which is scheduled to deliver late next year and commence a long-term charter to Sunoco. The newbuild program with vessels delivering through 2010 provides needed tonnage in the Jones Act trade, which is facing a significant phase-out of non-OPA compliant vessels."
Whitworth will lead OSG's U.S. Flag strategic business unit from its offices in Tampa, Florida and will report directly to Arntzen.
The management team of OSG's U.S. Flag unit includes Eric F. Smith, 41, who previously led the unit, as Chief Commercial Officer and Head of Government Affairs, Jack Robinson, 57, as Vice President Marine Operations, Christopher J. Flanagan, 47, as Vice President Marine Technical, Norman D. Gauslow, 60, as Vice President Marine Labor Relations and Matthew J. Yacavone, 39, as Vice President Business Development.