The merger of International Seaways and Diamond S Shipping will create the second-largest US-listed tanker company by vessel count and third-largest by dwt with an enterprise value of approximately US$2Bn
International Seaways, Inc (INSW) and Diamond S Shipping Inc, (Diamond S), have announced that their boards of directors have unanimously approved a definitive merger agreement pursuant to which INSW will merge with Diamond S in a stock-for-stock transaction.
Subsequent to the merger, INSW and Diamond S shareholders will own approximately 55.75% and 44.25% of the combined company, respectively, using fully diluted share counts as of 30 March 2021.
The companies said the merger of Diamond S with INSW unites two companies with long-term customer relationships, similar cultures, and complementary positions in key tanker sectors.
The merger will enhance INSW’s capabilities in both the crude and product markets and create ’power alleys’ for INSW in the large crude VLCC, Suezmax, LR1/Panamax and MR markets.
The merger will create the second-largest US-listed tanker company by vessel count and the third-largest by deadweight.
On a pro forma basis, the combined company will have 100 vessels, shipping revenues of over US$1Bn, more than 2,200 employees, and an enterprise value of approximately US$2Bn.
Douglas Wheat, Lois Zabrocky and Jeffrey Pribor will continue to serve as the chairman of the board of directors, chief executive and chief financial officer of INSW, respectively, and the current CEO of Diamond S, Craig Stevenson Jr, will join the board of directors of INSW, and also act as a special advisor to the CEO for a 6-month period to ensure a smooth transition.
“We are excited to enter into this transformational transaction and create an industry bellwether,” said INSW president and chief executive Lois Zabrocky. “By bringing together two leading US-based diversified tanker owners, we expect to deliver a number of compelling strategic and financial benefits to the stakeholders and customers of both companies. Specifically, with our enhanced scale and capabilities combined with a best-in-class ESG track record, we are ideally positioned to meet the evolving needs of leading energy companies and capitalise on favourable long-term industry fundamentals. With this highly accretive merger, we also expect to realise significant cost synergies while maintaining one of the lowest net leverage ratios in global shipping and increasing our equity market capitalisation and liquidity for the benefit of our shareholders.
“We are proud of INSW’s accomplishments since becoming a public company over four years ago and intend to continue to maintain an intense focus on preserving our financial strength and executing a balanced and accretive capital allocations strategy. In addition to the special dividend related to this compelling transaction, we remain committed to returning capital to shareholders through our share repurchase programme and our quarterly dividend.”
INSW chairman of board of directors Douglas Wheat said, “With this transaction, we are establishing a leading diversified tanker company with the scale, financial strength and commercial expertise to create lasting value for both shareholders and customers. We look forward to joining forces with Diamond S and continuing to meet the highest operational standards with an unwavering focus on safety and sustainability in the maritime sector. We believe the combined company is well positioned to capitalise on opportunities in both the current market environment and well into the future.”
Diamond S president and CEO Craig Stevenson Jr commented, “By combining our fleet and capabilities with INSW’s world-class operations, we believe the merger will significantly benefit each company’s stakeholders as market conditions improve. Importantly, both INSW and Diamond S share a similar focus on people, safety, meeting customer expectation, maintaining balance sheet strength, and appropriately managing leverage in an inherently cyclical industry. As a long-time proponent of industry consolidation, I believe this transaction gives the combined company the scale and diversity necessary to hold the status as a leader in the tanker markets for years to come.”
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