Newly enlarged Dockwise targeted by Boskalis

Royal Boskalis Westminster has long been best known as one of the world’s leading dredging companies and is active in that sector both in ports and harbours and, increasingly, in the offshore energy sector, but used its leading position in that market and its good cash position to acquire port and harbour towage specialist Smit.

Now, Boskalis has set its sights on diversifying further and, having presumably identified Dockwise as its intended target some time ago, had to wait until Dockwise had completed the rather acrimonious acquisition of Fairstar before it could unveil its bid for the newly-enlarged heavy lifter.

In early January 2013, Boskalis announced that it had the funds in place to proceed with the all-cash voluntary public offer for all the issued and outstanding ordinary shares of Dockwise at a price of €18.50 per share cum dividend.

The offer values Dockwise, which specialises in transporting rigs and platforms for the offshore oil and gas industry, at €733 million with an enterprise value of approximately €1.25 billion. Boskalis will finance the offer and refinance existing facilities through a mix of existing cash resources, new senior debt facilities and an equity issuance.

Boskalis confirmed that it had taken what it called “reasonable measures” to ensure that it will be able to finance the equity part of the offer and that it has secured €1.3 billion of committed financing arrangements with tenors of up to five years. The combination of the committed debt financing and the intended issue of new equity will be used to finance the offer and for general corporate purposes.

In respect of the equity issue, Boskalis convened an extraordinary general meeting of shareholders (which was due to take place on 10 January 2013) to request the shareholders to authorise the board of management, subject to the approval of the supervisory board, to issue new Boskalis shares up to a maximum of 10 per cent of the number of ordinary shares currently issued.

In addition to the proceeds of the equity offering and the existing cash resources, the financing will comprise a combination of three- and five-year bank facilities and a one-year bridge facility for a combined total of €1.3 billion. The financing has been arranged with a group of banks comprising ABN AMRO Bank, ING Bank, Rabobank and The Royal Bank of Scotland.

The debt financing is subject to customary conditions and is in line with current market practice. Boskalis has no reason to believe that these conditions will not be fulfilled on or prior to the settlement date. In line with regulatory requirements, Boskalis was due to submit a request for approval of its offer document to the Oslo Stock Exchange and the Netherlands Authority for the Financial Markets. The offer document was expected to be published and the offer is expected to commence in the week of the 21 January 2013.

In an earlier statement issued at the end of 2012, Boskalis had confirmed its intention to make an all-cash voluntary public offer (through its wholly owned subsidiary Boskalis Holding BV) for all the issued and outstanding ordinary shares of the semi-submersible heavy-lift vessel company, and noted that the offer price was €18.50 per share cum dividend, which was an increase of 50 euro cents relative to its announcement of 17 December.

Boskalis said the offer price represents:

• a premium of approximately 74 per cent relative to the closing price of €10.66 per share of Dockwise as per 23 November 2012

• a premium of approximately 45 per cent relative to the average closing price of an ordinary share of Dockwise during the last three months, and

• a premium of approximately 40 per cent relative to the average closing price of an ordinary share of Dockwise during the last 12 months.

Boskalis said it “strongly believes that the offer price represents full and fair value for the shareholders of Dockwise,” and noted that HAL Investments BV and Project Holland Deelnemingen BV – other shareholders in Dockwise, holding approximately 11.1 per cent of the shares – had agreed to an irrevocable undertaking to support and accept the offer in accordance with its terms, subject to customary conditions. Together with shares already acquired by Boskalis, in total approximately 33 per cent of Dockwise’s shares, this means that approximately 83.5 per cent is already committed to the offer.

“Constructive discussions are ongoing between Boskalis and Dockwise with respect to the proposed transaction,” said Boskalis. “Boskalis has started its due diligence and is preparing the necessary regulatory filings, including relevant filings to antitrust authorities.”

In Dockwise’s latest statement on the deal, the company said it welcomed the increase in the offer prices and said it would continue the dialogue with Boskalis with the aim of reaching agreement on a merger document which could be recommended to its shareholders and other stakeholders in the company.

In November, Fairstar, now a subsidiary of Dockwise, announced the commissioning of a new Type 1 semi-submersible heavy-lift vessel, to be named White Marlin, and the christening of its most recent newbuild vessel, Finesse.

On acquiring Fairstar Heavy Transport in July 2012, Dockwise took charge of a set of vessel development plans and commitments. The status of the construction works on the third newbuild vessel, following Forte and Finesse, provided an opportunity to consider the optimal configuration for the new combined fleet. Following discussions with the fabrication yard, Guangzhou Shipyard International (GSI), the original contract, for a Type 2 vessel to be named Fathom, has been renegotiated and a commission placed for a Type 1 vessel to be named White Marlin.

White Marlin’s specification will give it a capacity and vessel capabilities similar to Dockwise’s existing Blue Marlin. Scheduled delivery will be in the fourth quarter of 2014, for a total investment of US$150 million.

Fairstar said the decision to build a Type 1 rather than a Type 2 vessel, for a cost increase of some US$40 million, removed the requirement Dockwise faced to withdraw its existing Type 2, Black Marlin, from service in order to convert it to a Type 1 to satisfy growing demand for larger vessels. Such a conversion, at an estimated cost of US$60 million would have removed one of Dockwise’s most commercially versatile ships for up to two quarters during a peak period of activity.

Speaking at the time that the decision was announced, Andre Goedee, chief executive of Dockwise, said the board of Dockwise was pleased with this outcome, and noted that the acquisition of Fairstar allowed the company to optimise operational capacity of the top end of its fleet.

“In White Marlin, we will have a brand new Type 1 vessel, constructed by a yard with whom we have built a strong relationship. We shall also realise a considerable saving on our existing upgrade plans and keep at sea another important vessel during a busy period when our clients have every need of a consistent service,” he said.

Dockwise also announced that the christening ceremony of Finesse had taken place at LongXue Shipbuilding, LongXue Island, in Nansha District, China, on 31October. Finesse is a semi-submersible heavy lift Type 2 transport vessel, 216m long with a breadth of 43m, and is capable of transporting cargo up to 50,000 tonnes.

Also under construction for Dockwise and close to completion is revolutionary new vessel Dockwise Vanguard, the first example of the company’s Type 0 design, which will have a deadweight of 117,000 tonnes. The revolutionary bowless design will allow entire intact superstructures to be transported in a new way as the entire length of the vessel can be used. The game-changing vessel has been specifically designed to enable oil and gas majors and engineering, procurement, installation and construction (EPIC) contractors to consider design and transport opportunities for mega offshore units, which were until now considered unthinkable.

Subsea 7 consolidates renewables division into SHL

In January, Subsea 7 confirmed that it is to consolidate its renewable energy division into its 50 per cent owned joint venture Seaway Heavy Lifting (SHL). The consolidation will rationalise Subsea 7’s offering to the renewables market, and enable SHL to leverage Subsea 7’s engineering and project management expertise to broaden its range of services and target larger projects.
Subsea 7 established the division in 2011, principally targeting offshore wind projects in Europe. SHL has established a track record of successfully delivering offshore wind installation projects including the Greater Gabbard, Sheringham Shoal and Gwynt y Môr projects offshore UK, and the Riffgat and Borkum West II projects offshore Germany. OSJ