The following is the text of a press release issued by International Shipholding Corp.:
(MOBILE, Ala.) — International Shipholding Corporation (NYSE: ISH) announced today that it has entered into a definitive agreement to acquire a 100% ownership interest in U.S. United Ocean Services, LLC (“UOS”), a wholly-owned subsidiary of United Maritime Group, LLC (“UMG”), for a total purchase price of approximately $111 million cash, subject to customary closing adjustments.
Founded in 1959, UOS provides marine transportation services for dry bulk and break-bulk commodities in the United States. UOS operates the largest U.S. Flag Jones Act dry bulk fleet today (131,000 dead weight tons), which consists of two handysize bulkers and four tug/barge units. The fleet operates under long-term contracts with Tampa Electric (“TECO”) and The Mosaic Company (“Mosaic”), both of whom have maintained longstanding relationships with UOS that have spanned several decades.
This acquisition will provide ISH with increased scale and a more diverse product offering within the U.S. Flag Jones Act dry bulk transportation market, where ISH maintains a strong position. The acquisition fits within ISH’s core growth strategy of acquiring assets to fill niche market needs, expanding contracted revenue with quality counterparts, and broadening customer relationships.
Mr. Niels M. Johnsen, ISH’s Chairman and Chief Executive Officer, stated, “We are pleased to acquire United Ocean Services from United Maritime Group, a leader in dry bulk coastwise transportation in the United States for over 50 years. This acquisition enables management to capitalize on a growth opportunity in a niche market that is expected to be accretive to both earnings and free cash flow. The addition of these vessels strengthens our presence and improves our operating efficiencies in the U.S. Flag Jones Act dry bulk market. Additionally, we anticipate that this transaction will increase our contracted revenue stream to approximately 68% of total revenue in 2013.”
ISH plans to operate UOS as a separate subsidiary while retaining its current management team.
The transaction is expected to close in the fourth quarter of 2012, subject to receipt of applicable regulatory clearances and satisfaction or waiver of other customary closing conditions.
The Company has committed debt financing in place from its core bank group to help fund the acquisition, subject to meeting conditions precedent under those commitments. In addition, the Company will also consider other sources of financing to fund the acquisition.
DNB Markets, Inc. acted as exclusive financial advisor to ISH.
Niels M. Johnsen, Chairman and Chief Executive Officer, and Manuel G. Estrada, Chief Financial Officer, will host a conference call on Thursday, October 11, 2012 at 11:00 a.m. (ET) to discuss the acquisition. All stockholders and interested parties are invited to listen to the live conference call by dialing (888) 244-2488 (domestic) or (913) 312-0420 (international) and referencing the passcode 4879591. Please dial in approximately 5 minutes prior to the call.
The conference call will also be available via a live listen-only webcast and can be accessed through the Investor Relations section of the Company’s website, www.intship.com. Please allow extra time prior to the call to visit the Company’s website and download any software that may be needed to listen to the webcast.
A replay of the conference call will be available through October 18, 2012 at (877) 870-5176 (domestic) or (858) 384-5517 (international). The passcode for the replay is 4879591.
