World’s Largest Offshore Accommodation Company to be Formed With Merger
World’s largest offshore accommodation company to be formed with the merger of Prosafe and Floatel
Prosafe SE and Floatel International Ltd (“Floatel”), have today come to an agreement to merge their respective businesses to deal with challenging and changing market
Both companies aim to form a more robust company with improved services and geographical presence, able to survive on sustainable terms in a prolonged cyclical downturn and challenging markets for offshore accommodation.
Prosafe SE, Stavanger, is a leading owner and operator of semi-submersible accommodation vessels (flotels) listed on the Oslo Stock Exchange, and, like Floatel International Ltd, Bermuda, delivers offshore accommodation to clients in the oil and gas industry worldwide. In a merger of equals, Prosafe will acquire Floatel with consideration in Prosafe shares, whereby Floatel’s principal shareholders will become large shareholders in Prosafe.
A merged company will have the most modern and flexible fleet in the global market, with lower costs, increased geographical presence and a strengthened customer offering, said Prosafe.
Combining Prosafe’s existing nine semi-submersible vessels and options for two newbuild semi-submersible vessels with Floatel’s five semi-submersible vessels, makes them worlds leaders in accommodation units.
For the year ended 31 December 2018, the combined company had revenues of more than USD 600m and an EBITDA of more than USD 300m.
Hot Tip
Combined firm contract backlog at 31 March 2019 is approximately USD 225m. In addition, Prosafe recently announced a three-year contract for the Safe Eurus in Brazil which adds about USD 80m to the contract backlog, while Floatel has recently been awarded a 4-month extension at Martin Linge which adds a further USD 22m to the contract backlog.
The number of Consideration Shares is based on an agreed exchange ratio of 55/45 (Prosafe/Floatel) on a fully diluted basis and includes 2,017,469 warrants to be issued to the management of Floatel as replacement of existing management warrants in Floatel. Total number of ordinary outstanding shares in Prosafe following the transaction will be 159,837,921, and the total number of shares on a fully diluted basis will be 177,758,173. No agreements have or will be entered into in connection with the transaction for the benefit of the board of directors of either company.
Hot Tip
The combined company’s largest shareholders will be FELS Offshore Pte. Ltd., funds managed by Oaktree Capital Management, L.P. (“Oaktree”) and HitecVision, which, respectively, will hold approximately 22%, 19% and 16% of the shares on a fully diluted basis. Post completion, these shareholders have agreed to a 12-month lock-up of their shares, Prosafe added.
All stakeholders agreed that Glen Ole Rødland, Chairman of Prosafe SE, will become chairman of the combined company. FELS Offshore Pte. Ltd. and Oaktree will nominate one board member each.
Transaction is expected to be completed in the third quarter of 2019, pending all conditions are met, including clearances from competition authorities in Norway and the UK, required consents from its creditors and shareholder approvals.