The Corporate Restructuring Report-Tidewater Inc. (TDW) Update
On July 16th, 2018, Tidewater Inc. (NYSE:TDW) announced plans to acquire GulfMark Offshore Inc. (NYSE:GLF) in an all-stock deal. Under the terms of the plan, the combined entity will operate under the Tidewater brand and will be led byTDW's CEO John Rynd. GulfMark stockholders will receive 1.1 shares of TDW common stock held. Collectively, GulfMark shareholders will own 27% ownership of the combined company after completion of the combination, or 26% on a fully-diluted basis. he transaction is expected to close in 4Q18.
The deal allows Tidewater to expand its presence in the North Sea basin, which is showing signs of recovery. The combined entity will boast of the industry's largest fleet and the braodest global operating footprint in the offshore support vessel (OSV) market. The all-equity transaction preserves balance sheet strength, thereby enhancing ability to grow organically and pursue additional acquisitions. The merger is expected to generate significant revenue and cost synergies (~$30 million by 4Q19) which should provide tailwind to topline and bottomline.
The offshore vessel market is showing signs of recovery, though near-term headwinds continue to persist and will put pressure on the day rates and utilization levels. However, new Tidewater, owing to its larger size, is well positioned to navigate the current headwinds and benefit from an eventual industry recovery. We believe Tidewater is undervalued at current levels.
Tidewater provides offshore marine support and transportation services to the global offshore energy industry through the operation of a fleet of marine service vessels. The company's vessels and associated vessel services provide support of several phases of offshore oil and natural gas exploration, field development and production. These services include towing of, and anchor handling for, mobile offshore drilling units; transporting supplies and personnel necessary to sustain drilling, workover and production activities; offshore construction and seismic and subsea support; and a variety of services such as pipe and cable laying.
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