Houston Based Company Buys 37 PSVs for $577MM

Houston based Tidewater Inc. (NYSE: TDW) revealed Tuesday that it has made a deal to purchase 37 of Solstad Offshore ASA’s platform supply vessels (PSV) for $577 million.

The deal solidifies Tidewater as the leading high-specification PSV operator, enhances the company’s position as the leading global OSV operator with a world-class fleet, and creates the world’s largest hybrid fleet, Tidewater noted in a company statement posted on its website. It also serves as a platform for cash flow generation, Tidewater outlined.

Tidewater said it intends to fund the transaction through a combination of new debt and cash on hand. The deal, which the company highlighted is subject to customary regulatory approvals, was unanimously approved by Tidewater’s board of directors and is expected to close in the second quarter of this year, Tidewater revealed.

In a statement posted on its site, Solstad said the “strategic move” reduces the company’s debt by approximately NOK 6 billion ($571.8 million) and added that it will “considerably strengthen” Solstad’s balance sheet, debt service ability, and liquidity position. 

Solstad also noted that the deal repositions the company “as one of the main global owners and operators of high-end AHTS and Subsea vessels that are essential to realize the energy transition” and “further enables Solstad to increase its presence in the renewable energy segment”.

In the statement, Solstad said its fleet will continue to support clients that operate in the offshore energy sector. Both offshore renewables and oil and gas are predicted to see significant investments in the coming years, the company stated.

“This agreement to acquire 37 PSVs from Solstad Offshore marks yet another important milestone in the strengthening of Tidewater’s leadership position as we continue to capitalize on the rapidly improving OSV market,” Quintin Kneen, Tidewater’s President and Chief Executive Officer, said in a company statement.

“This acquisition further solidifies Tidewater as the leader in large, high-specification PSVs and as the new global leader in hybrid PSVs. These vessels make up the highest specification PSV fleet of its size anywhere in the world. All 37 vessels are currently active and are working throughout the world, principally in the North Sea, but also in Brazil, Australia and West Africa,” Kneen added.

“Assuming the transaction closes at the end of the second quarter, we are updating our revenue guidance for 2023 to approximately $1.03 billion and our vessel operating margin guidance for 2023 remains the same at approximately 50.0 percent,” Kneen continued.

“This transaction is just the latest in a series of transformative steps Tidewater has taken to drive long-term earnings and cash flow generation. We are focused on bringing together the world’s best OSV fleets to create the safest, most sustainable, most reliable, most profitable high-specification OSV fleet in the world,” the Tidewater President went on to state.

Lars Peder Solstad, the CEO of Solstad Offshore, said, “the sale of the PSVs represents a shift in our strategy in a changing market”.

“The PSVs mainly support the oil and gas industry, while the AHTSs and CSVs can service all offshore energy sectors, including oil and gas and renewables. This move is therefore in line with our strategy of being a key enabler in the energy transition. Further, the transaction will give Solstad greater financial leeway and a significantly improved debt and cash position going forward,” he added.

“Following the transaction, the core competence of future Solstad will be even better applied to further developing the CSV and AHTS segments, including building up our service division and capitalizing on a stronger position in the renewable energy market. The generally higher margins for AHTS and CSVs will allow us to improve our financials, strengthen our renewable energy presence, and put us in a position to, over time, renew our fleet,” Solstad continued.

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