May 29, 2008
GulfMark Offshore to acquire Rigdon Marine
GulfMark Offshore, Inc. (NYSE:GLF) reports that it has entered into a definitive purchase agreement to acquire Rigdon Marine Corporation (RMC), in a deal that values Rigdon at upwards of $550 million, based on yesterday's $63.56 per share closing price for GulfMark stock.
Under the terms of the agreement, GulfMark will acquire 100% of the outstanding equity interest of Rigdon Marine and its holding company for comprising $150 million in cash and approximately 2.1 million shares of GulfMark common stock, plus assumption of approximately $268 million in debt and approximately $19 million in expenditures to complete the vessels under construction. GulfMark expects to finance the cash portion of the consideration with cash on hand and borrowings under its current $175 million revolver.
Larry Rigdon, President and CEO of Rigdon Marine, will join the GulfMark board.
GulfMark says the purchase will add the Rigdon management team, an experienced group of mariners and a fleet of modern vessels designed to support the expanding demand in the deepwater Gulf of Mexico. The combined company will initially operate 90 vessels with an additional 16 vessels under construction for delivery through 2010. Geographically diversified, the combined fleet will have 24 vessels in the domestic Gulf of Mexico bringing the total fleet to 34 vessels based in the Americas, 42 vessels based in the North Sea and 14 in Southeast Asia.
The deal will give the expanded GulfMark an enterprise value approaching $2 billion. It will add annualized revenues of over $115 million from the 22 owned vessels in the Rigdon fleet at closing.
Revenue contribution from the total 28 owned vessel Rigdon fleet could approach an annual rate of $150 million.
It will creates one of the world's youngest, largest and most geographically balanced, high specification offshore support vessel fleets with an average age of less than 10 years.
The combination of GulfMark and Rigdon Marine will create an organization of over 2,000 employees and 90 vessels, capable of working in virtually all OSV markets, with an additional 16 vessels of several different designs under construction.
Nine of the vessels will deliver between the middle of 2008 and the middle of 2009 and the remaining seven between mid 2009 and mid 2010.
Bruce Streeter, President and CEO of GulfMark said, "Rigdon Marine has an excellent employee base with a strong management team, excellent market penetration and a growing fleet of well designed vessels. The addition of Rigdon Marine will complement and expand the strong asset base of GulfMark. The integration of the two companies with strong safety cultures, highly skilled employee bases and equipment designed to meet the future needs of the industry, strategically positions the combined company for future growth and value creation. In addition to the domestic U.S. vessel operations and customer base, we will add operations in Trinidad and a vessel working in support of seismic services worldwide. Our Americas operations will now encompass the U.S., Mexico, Trinidad and Brazil. We expect the combination to be accretive to GulfMark earnings and cash flow per share from the outset, including the remaining part of 2008. More importantly, as future vessel deliveries of the combined company enter the market, GulfMark will have a strong position in the domestic United States market and the capacity to expand to further locations, thus complementing our strong international presence."
Larry Rigdon, President and CEO of Rigdon Marine, commented, "GulfMark is a solid company with a large technically-advanced fleet and a company culture that blends well with Rigdon's. I believe that the combination of Rigdon and GulfMark will benefit the shareholders of both companies, and more importantly, provide further opportunities for all our employees to grow and reach their career objectives."
Transaction DetailsIn conjunction with the transaction, Mr. Rigdon will join the GulfMark Board of Directors.
The boards of directors of GulfMark and Rigdon Marine have both unanimously approved the transaction. The transaction is expected to close during the third quarter of 2008 and is subject to regulatory approvals, certain due diligence, financing and other customary conditions.