Eitzen Maritime Services ASA. Acquisition of Seven Seas Shipchandlers LLC MUSD 50 Private Placement. June 2008. Disclaimer.
Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.
Acquisition of Seven Seas Shipchandlers LLC
MUSD 50 Private Placement
This presentation and its enclosures and appendices (hereinafter jointly referred to as the “Presentation” has been prepared by Eitzen Maritime Services ASA (the ”Company”) exclusively for information purposes. This Presentation has not been reviewed or registered with any public authority or stock exchange. Recipients of this Presentation may not reproduce, redistribute or pass on, in whole or in part, the Presentation to any other person.
The distribution of this Presentation and the offering, subscription, purchase or sale of securities issued by the Company in certain jurisdictions is restricted by law. Persons into whose possession this Presentation may come are required by the Company to inform themselves about and to comply with all applicable laws and regulations in force in any jurisdiction in or from which it invests or receives or possesses this Presentation and must obtain any consent, approval or permission required under the laws and regulations in force in such jurisdiction, and the Company shall not have any responsibility or liability for these obligations. This Presentation does not constitute an offer to sell or a solicitation of an offer to buy any securities in any jurisdiction to any person to whom it is unlawful to make such an offer or solicitation in such jurisdiction.
NEITHER THIS PRESENTATION NOR ANY PART OF COPY OF IT MAY BE TAKEN OR TRANSMITTED INTO THE UNITED STATES OR DISTRIBUTED, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES. THE SHARES OF THE COMPANY HAVE NOT AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED OR ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES. ACCORDINGLY, SHARES IN THE COMPANY WILL ONLY BE OFFERED OR SOLD OUTSIDE THE UNITED STATES IN OFFSHORE TRANSACTIONS IN ACCORDANCE WITH REGULATION S UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED. NONE OF THE COMPANY’S SHARES HAS BEEN OR WILL BE QUALIFIED FOR SALE UNDER THE SECURITIES LAWS OF ANY PROVINCE OR TERRITORY OF CANADA. THE COMPANY’S SHARES ARE NOT BEING OFFERED AND MAY NOT BE OFFERED OR SOLD, DIRECTLY OR INDIRECTLY, IN CANADA OR TO OR FOR THE ACCOUNT OF ANY RESIDENT OF CANADA IN CONTRAVENTION OF THE SECURITIES LAWS OF ANY PROVINCE OR TERRITORY THEREOF.IN RELATION TO THE UNITED KINGDOM, THIS PRESENTATION AND ITS CONTENTS ARE CONFIDENTIAL AND ITS DISTRIBUTION (WHICH TERM SHALL INCLUDE ANY FORM OF COMMUNICATION) IS RESTRICTED PURSUANT TO SECTION 21 (RESTRICTIONS ON FINANCIAL PROMOTION) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005. IN RELATION TO THE UNITED KINGDOM, THIS PRESENTATION IS ONLY DIRECTED AT, AND MAY ONLY BE DISTRIBUTED TO, PERSONS WHO FALL WITHIN THE MEANING OF ARTICLE 19 (INVESTMENT PROFESSIONALS) AND 49 (HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC.)OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 OR WHO ARE PERSONS TO WHOM THE PRESENTATION MAY OTHERWISE LAWFULLY BE DISTRIBUTED.
The information contained herein has been prepared to assist outside parties in making their own evaluation of the Company and does not purport to contain all information that such interested parties may desire. In all cases, interested parties should conduct their own investigation and analysis of the Company, its business, prospects, results of operations and financial condition and are welcome to do so by contacting the Company any time before closing. No party has made any kind of independent verification of any of the information set forth herein, including any statements with respect to projections or prospects of the Business or the assumptions on which such statements are based, and does not undertake any obligation to do so. The contents of this Presentation are not to be construed as legal, business, investment or tax advice. Each recipient should consult with its own legal, business, investment and tax adviser as to legal, business, investment and tax advice.
There may have been changes in matters which affect the Company subsequent to the date of this Presentation. Neither the issue nor delivery of this Presentation shall under any circumstance create any implication that the information contained herein is correct as of any time subsequent to the date hereof or that the affairs of the Company have not since changed and the Company does not intend, and does not assume any obligation, to update or correct any information included in this Presentation.
This Presentation includes and is based on, among other things, forward-looking information and statements. Such forward-looking information and statements are based on the current expectations, estimates and projections of the Company or assumptions based on information available to the Company. Such forward-looking information and statements reflect current views with respect to future events and are subject to risks, uncertainties and assumptions. The Company cannot give any assurance as to the correctness of such information and statements.
An investment in the Company involves a high degree of risk, and several factors could cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements that may be expressed or implied by statements and information in this Presentation, including, among others, risks or uncertainties associated with market segments, development, growth management, financing, market acceptance and relations with customers, and, more generally, general economic and business conditions, changes in domestic and foreign laws and regulations, taxes, changes in competition and pricing environments, fluctuations in currency exchange rates and interest rates and other factors. Should one or more of these risks or uncertainties materialise, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this document.
The Company\'s board of directors hereby confirm that to the best of their knowledge the information regarding the Company contained in the Presentation as of its date is in accordance with the facts and contains no omissions likely to affect the contents of the Presentation, and which may materially influence the assessment of the Company as an investment object or the valuation of the shares in the Company. Market conditions and future prospects have been appraised on the basis of best judgment.
Fondsfinans ASA, Kaupthing ASA and Orion Securities AS does not accept any responsibility for the information contained in the Presentation.
This Presentation is subject to Norwegian law, and any dispute arising in respect of this Presentation is subject to the exclusive jurisdiction of the Norwegian courts.
Eitzen Maritime Services ASA (EMS) to acquire Seven Seas Shipchandlers LLC (Seven Seas)
Seven Seas is the leading Middle East ship supplier
MUSD 193 in 2007 turnover, EBITDA of MUSD 14.9
Gross acquisition price of MUSD 115
No interest bearing debt
Large, modern warehouse with prime location in Dubai included in transaction
Financing guarantee in place
Private placement of MUSD 50 fully underwritten by
Camillo Eitzen & Co. ASA
Senior bank debt of MUSD 50 provided by a consortium
led by Nordea and Kauthing at LIBOR + 3.25%
Two year seller’s credit of MUSD 20 (non-interest bearing)
Subsequent offering for EMS shareholders not invited to
participate in the private placement
EMS has an option to pay up to MUSD 5 of the gross
acquisition price in shares
* Pre transaction costs
Capital requirement of approximately MUSD 115 in total,
whereof MUSD 50 funded by bank debt and MUSD 20 by
Private placement and documentation
Fully underwritten by Camillo Eitzen & Co. ASA at NOK 3.0 per New Share
65% of the private placement is intended for existing shareholders of which Camillo Eitzen & Co. ASA will subscribe for its pro-rata share
Minimum subscription/allotment NOK equivalent to EUR 50,000
Documentation: Investor presentation, term sheet and terms of
Eitzen Maritime Services ASA
Shares sold in private placement
Shares prior to private placement 140.5 million
New Shares*: 75.7- 85.8 million
Price range (NOK): 3.0-3.4
Shares after private placement*: 216.2-226.3 million
Pre offering at NOK 3.2/share (mid-range): MNOK 450
Post offering at NOK 3.2/share (mid-range): MNOK 707
* Numbers can change. Calculations based on a NOK/USD as of 11th June 2008 of 5.15
EMS Ship Management
Revenue split (2007P)
Obtaining a global footprint and creating economies of scale and synergies
=> Improved profitability, growth, balance sheet and stock market attractiveness
* EMS 2007 figures is proforma incl. full-year of Provimar earnings. 2007 EBITDA include non-recurring restructuring charges of MNOK 27.9
Economies of scale
Synchronizing product portfolios, stocking and sourcing
Creating the leading global ship supplier company
Acquisition will result in a sales growth close to 100% within EMS’ ship supply division
Closes an important geographical gap for EMS
Seven Seas is the dominant Middle East ship supplier
Reputed Dubai based company in a fast growing shipping and logistics hub
Started in 1986 by Mr. Freddy Sidhwa, age 63
Impressive logistics operation built in a high growth area
Management, organization and IT systems in place
Prime location of high standard premises with major expansion potential
Strong corporate structure with focus on details/ precision
Revenue of MUSD 193 in 2007
Approx. 70% of revenues generated from food supplies
UAE accounting for around 60% of revenues
60/40 split between military and commercial revenue
Strong and competent management with track record
Committed to continue after the transaction
Dubai facilities (93.000 m2 land, 32.000 m2 buildings)
The world’s largest airport under construction (120 mill passengers)
Military sales mix (MNOK 751 in 2007)
Civilian sales mix (MNOK 377 in 2007)
Increased presence - key account and cross region selling
Navy and military
IT and operations
Increased procurement power and reduced cost of goods
Underlying growth driven by expansion of merchant and offshore fleets
New segments opening in navy and fishery
Transparent markets with easy access to different ship suppliers’ prices & terms
Creates need for efficiency, purchasing power and optimal logistics& sourcing – supported by a fully integrated IT system
Increased focus on “global supplier”
Global presence important to serve shipping companies better
Key account approach
Consolidation likely to continue
EMS incl. Seven Seas largest player with 4-5%
Global ship supplier market estimated to be BUSD 10-15
4-5% market share
Fundamentals in place to support 10%+ market growth annually
EMS has become the definite leader in ship supply
Acquisition gives strong presence in one of the world’s most dynamic and fast growing shipping regions
Major leap towards the strategic goal of a global footprint
Margins and earning boosted by the acquisition
Favourable acquisition price
Ship Supply EBITDA margin target has been 5% for EMS. Management will aim to lift total ship supply margins towards 7% as seen for Seven Seas recently.
Organic growth expected around 10% annually
Ship Management EBITDA margin target of 20%
Become 1 of 3 largest players within the ship management market
Main shareholders and share price performance