Tidewater has become the largest operator of offshore vessels through the completion of the previously announced acquisition of Swire Pacific Offshore. The company confirmed that it completed the acquisition on April 22 saying that it will position Tidewater to capitalize on the recovery of the offshore vessel market.
As part of the transaction, Tidewater acquired Swire Pacific Offshore’s fleet of 50 vessels. They emphasized the quality of the fleet, which included 29 AHTs vessels and 21 PSVs, and the enhancement to the overall operation. SPO’s fleet is heavily engaged in West Africa and will enhance the combined company’s position in the region.
The acquisition follows the trend as the offshore market continues to consolidate and reposition. Tidewater, which completed a previous merger four years ago, said the combination will double its position in West Africa and strengthen operations in Southeast Asia and the Middle East. Further, all the vessels are currently active in what overall remains a weak market. However, there is renewed interest, especially in light of the increasing demand and prices in the global energy market.
“The acquisition of Swire Pacific Offshore marks another important milestone in the strengthening of Tidewater’s leadership position as we capitalize on the recovery in the OSV industry,” said Quintin Kneen, President and Chief Executive Officer of Tidewater in March 2022 when he announced the agreement. “I believe that the timing of this acquisition will allow Tidewater to capitalize on the continued improvement in the offshore supply vessel market, providing Tidewater with significant additional earnings and free cash flow generation potential as utilization and day rates continue to improve.”
The acquisition positioned Tidewater to be the largest offshore support vessel fleet in the world with a fleet size of 203 vessels, including crew boats, tugboats, and maintenance vessels. Tidewater leapfrogs past Bourbon Offshore and Edison Chouest, each of which has fleets of approximately 140 vessels.
In outlining the merits of the combination to shareholders, Tidewater reported that it has identified $45 million of annual cost synergies that it will target after the combination. The company will also maintain a strong balance sheet with approximately $110 million in cash.