Tidewater, GulfMark merger creates OSV giant

NOVEMBER 15, 2018 — Offshore services giant Tidewater Inc. (NYSE: TDW) today announced the successful completion of its merger with GulfMark Offshore, Inc., after the relevant proposals were approved by over 99% of the votes cast by Tidewater stockholders and GulfMark stockholders at the companies' respective stockholder meetings.

In connection with the completion of the transaction, trading in GulfMark common stock  ceased on the New York Stock Exchange as of the market close on November 15, 2018.

The merger creates a new Tidewater with 245 offshore supply vessels (OSVs) and some 273 vessels of all types, making it the biggest player in the offshore service vessel market. According to a Tidewater presentation, Bourbon has 180 and Chouest 164 OSVs as of June 30, 2018, making them the second and third largest in the market, respectively.

VesselsValue's Charlie Hockless says, "The consolidation between GulfMark and Tidewater is a positive for the market. With Tidewater’s steadfast and unyielding attitude towards the scrapping of non-performing vessels, this is a good chance for the market to reduce some of its oversupply. Hopefully with this new entity taking the lead, other market players might follow suit."

Hockless, Head of VesselsValue's Offshore, says, however, that consolidation can only occur "if lenders are willing to take haircuts and provide an opportunity for these companies to start afresh with a clean balance sheet. In the case of Solstad  Offshore, they undertook restructuring and consolidation as well. However, without a clean balance sheet, problems are only going to resurface further down the road. Bourbon is another major player who have struggled to service their debt and are actively looking for financiers. Kicking the can down the road is not a viable option in this market." The accompanying table by VesselsValue highlight the top OSV owners by size of fleet and valuation.OSV graph

Meanwhile, Tidewater President and CEO John Rynd says, the company is looking "forward to commencing the work of integrating our fleets and shore-base operations in order to quickly and fully realize the strategic and financial benefits of this business combination. A combined Tidewater and GulfMark will provide employees with more opportunities as part of a global leader with a deep commitment to safety and reliability, offer customers a broad range of highest quality, cost-effective support vessel services worldwide, and deliver to stockholders competitive returns on invested capital and scope for significant growth in revenue and free cash flow in an improving offshore market."

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