Offshore wind installation vessel market entrant Eneti has announced that it will acquire wind turbine installation vessel (WTIV) contractor Seajacks from its shareholders: Marubeni, INCJ and Mitsui OSK Lines.
Eneti will acquire 100% of Atlantis Investorco Limited, the parent of Seajacks International Limited, for consideration of approximately 8.13 million shares, USD299 million of assumed net debt, USD74 million of newly-issued redeemable notes, and USD12 million of cash.
The transaction has been approved by the boards of directors of Eneti and Seajacks’ selling shareholders, and is expected to close by the middle of the third quarter of 2021.
Upon closing, existing Eneti shareholders will own 58% of Eneti; Marubeni, INCJ and Mitsui OSK Lines will own 42%. As a result of the transaction, Mr. Hiroshi Tachigami of Marubeni and Mr. Peter Niklai of INCJ will join the Eneti Board of Directors.
Seajacks was founded in 2006 and is based in Great Yarmouth, UK. It owns five self-propelled jackups, and has a track record of installing wind turbines and foundations dating back to 2009. Its flagship, NG14000X design Seajacks Scylla, was delivered from Samsung Heavy Industries in 2015, and it is currently employed in the Asia Pacific market. NG5500C design Seajacks Zaratan is currently operating in the Japanese market under the Japanese flag. Three NG2500X specification jackups are employed in the North Sea market.
The acquisition will give Eneti a strong foothold in the Asia Pacific and North Sea offshore wind markets, and allow the company to quickly develop its track record as a wind farm installation contractor. Seajacks’ long experience in wind-market heavy-lift operations will also be useful once Eneti’s USD330 million newbuild WTIV—currently under construction at Daewoo Shipbuilding and Marine Engineering (DSME)—is delivered in the third quarter of 2024. In addition, the acquisition will boost Eneti’s Jones Act WTIV expertise. Seajacks is the technical manager for Dominion Energy’s Jones Act-compliant WTIV Charybdis, assisting with construction and operations oversight, and Eneti has been in talks with US shipyards about constructing its own Jones Act WTIV.
Based upon projected earnings from existing and projected employment, Seajacks is expected to have EBITDA in 2021 in the region of USD125 million. EBITDA projections for 2021 are based on USD224 million of projected revenue, of which 89% is related to existing contracted employment. In 2022, Seajacks is set to have firm revenue of approximately USD118 million through employment contracts on 63% of the available days for the Seajacks Scylla and Seajacks Zaratan.
The share consideration is comprised of 7,433,031 common shares and 700,000 preferential shares in Eneti, subject to closing adjustments. The preferred shares hold a liquidation preference, will receive regular dividends, are without voting rights, and will be converted to common shares (subject to certain conditions).
Additionally, Eneti signed binding agreements with counterparties in Japan to transfer the existing lease finance arrangements of five bulk carriers to affiliates of Scorpio Holdings Limited (Eneti’s former name) for USD16 million. Eneti’s independent directors approved this transaction in January 2021. The final vessel was delivered in July 2021, and marks the conclusion of Eneti’s exit from the dry bulk sector.