Creates Second Largest US-Listed Tanker
Company by Vessel Count and Third Largest by Dwt with an Enterprise
Value of Approximately $2 Billion
Significant Synergies and Efficiencies to
Drive Annual Cost Savings of over $23 Million and Revenue Synergies
over $9 Million
Maintains Financial Strength and One of the
Lowest Leverage Ratios in the Industry
Companies to Hold Investor Conference Call
at 9:00 a.m. Eastern Time (“ET”) on Wednesday, March 31,
2021
International Seaways, Inc. (NYSE: INSW) (the “Company” or
“INSW”) and Diamond S Shipping Inc. (NYSE: DSSI) (“Diamond S”), two
of the leading tanker companies worldwide providing energy
transportation services for crude oil and petroleum products in
International Flag markets, announced today 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 March 30, 2021.
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the full release here:
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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 and
Suezmax– and 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 (“dwt”). On a pro forma basis, the
combined company will have 100 vessels, shipping revenues of over
$1 billion, over 2,200 employees, and an enterprise value of
approximately $2 billion.
Among other benefits, INSW and Diamond S believe that the merger
will achieve the following:
- Double INSW’s net asset value in an all-stock merger to create
a diversified tanker company with a 1001 vessel fleet aggregating
11.31 million dwt and significant footprints in the VLCC, Suezmax,
LR1/Panamax and MR markets
- Accretive to INSW’s earnings and cash flow per share
immediately
- Realize estimated annual cost synergies in excess of $23
million and revenue synergies of $9 million, which are expected to
be fully realizable within 2022
- Enhance equity trading liquidity through a larger market
capitalization; estimated pro-forma market capitalization of close
to $1 billion based on INSW’s closing price of $18.36 on March 30,
2021
- Maintain significant financial strength, as INSW and Diamond S
would have had a combined pro forma net leverage ratio of 42%2 at
year-end 2020, one of the lowest in the tanker sector and across
global shipping. INSW and Diamond S also would have had robust
liquidity on a pro forma combined basis, with over $3002 million in
cash at December 31, 2020
- Build upon best-in-class safety and Environmental, Social and
Governance track records
- Enable combined company to maintain a $50 million share
repurchase authorization and a quarterly dividend policy.
Immediately prior to the closing of the merger, existing INSW
shareholders will also receive a special dividend of $1.10 per
share
Douglas Wheat, Lois Zabrocky and Jeffrey Pribor will continue to
serve as the Chairman of the Board of Directors, Chief Executive
Officer (“CEO”) 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 Lois Zabrocky, INSW’s
President and CEO. “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 capitalize on favorable long-term industry
fundamentals. With this highly accretive merger, we also expect to
realize significant cost synergies while maintaining one of the
lowest net leverage ratios in global shipping and increasing our
equity market capitalization 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 program and our quarterly
dividend.”
Douglas Wheat, Chairman of INSW’s Board of Directors, 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
capitalize on opportunities in both the current market environment
and well into the future.”
Craig Stevenson Jr., President and CEO of Diamond S, 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.”
Nadim Qureshi, Chairman of the Board of Directors of Diamond S,
said “We are pleased to enter into a transaction that will both
create near-term value for our shareholders and create a superior,
scale vehicle that enables investors to gain exposure in both the
crude and product tanker markets with strong fundamentals.
Importantly, since the focus of the management teams of both
Diamond S and INSW are similar, we see further value from synergies
in the combined company. We look forward to working with the team
at INSW to see the transaction through to completion and ensure a
great outcome for our shareholders.”
Key Terms of the Merger
- Diamond S shareholders will receive 0.55375
shares of INSW common stock for each share of Diamond S common
stock held. Based on the closing prices of INSW’s shares on March
30, 2021, the total stock consideration in the transaction has a
value of approximately $416 million.
- 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 March 30, 2021.
- INSW will assume Diamond S’ net debt, which
was $5652 million as of December 31, 2020.
- Immediately prior to the closing of the
transaction, existing INSW shareholders will also receive a special
dividend of $1.10 per share.
- Diamond S’ affiliate management agreements
with Capital Ship Management (“CSM”) will be phased out over time,
without interruption to the key customers being served by the
vessels under CSM management.
- The merger, which is expected to close in
the third quarter of 2021, is subject to the approval of the
shareholders of INSW and Diamond S, regulatory approvals, and other
customary closing conditions.
- The Board of Directors of INSW will
comprise seven representatives of INSW and three representatives of
Diamond S.
- A group of shareholders, representing
approximately 14% and 29% of the issued and outstanding shares of
INSW and Diamond S, respectively, has committed to vote in favor of
the merger, subject to the terms and conditions contained in voting
agreements reached with INSW and Diamond S.
- Following the merger, INSW will remain
listed on the NYSE under the symbol “INSW”.
- INSW and Diamond S received support for the
transaction from the Diamond S bank group, led by Nordea Bank Abp,
Crédit Agricole Corporate and Investment Bank and Skandinaviska
Enskilda Banken AB (publ), who each also form key parts of INSW’s
lending group, and along with the remaining banks in the group have
provided consents and agreed to amend their loan facilities.
For further information about the merger, please refer to the
Registration Statement to be filed with the SEC by INSW.
Advisors
Jefferies LLC is serving as INSW’s financial advisor for the
transaction with Cleary Gottlieb Steen & Hamilton LLP and
Holland & Knight LLP acting as its legal advisors.
Moelis & Company LLC is serving as Diamond S’ financial
advisor for the transaction, with White & Case LLP and Seward
& Kissel LLP acting as its legal advisors.
Conference Call
The Company will host a conference call to discuss the
transaction at 9:00 a.m. Eastern Time (“ET”) on Wednesday, March
31, 2021. To access the call, participants should dial (855)
940-9471 for domestic callers and (412) 317-5211 for international
callers. Please dial in ten minutes prior to the start of the call.
A live webcast of the conference call will be available from the
Investor Relations section of the Company’s website at
www.intlseas.com.
An audio replay of the conference call will be available
starting at 12:00 p.m. ET on Wednesday, March 31, 2021 through
11:59 p.m. ET on Wednesday, April 7, 2021 by dialing (877) 344-7529
for domestic callers and (412) 317-0088 for international callers,
and entering Access Code 10153838.
About International Seaways, Inc.
International Seaways, Inc. (NYSE: INSW) is one of the largest
tanker companies worldwide providing energy transportation services
for crude oil and petroleum products in International Flag markets.
INSW owns and operates a fleet of 36 vessels, including 11 VLCCs, 2
Suezmaxes, 4 Aframaxes/LR2s, 13 Panamaxes/LR1s and 4 MR tankers.
Through joint ventures, it has ownership interests in two floating
storage and offloading service vessels. INSW has an experienced
team committed to the very best operating practices and the highest
levels of customer service and operational efficiency. INSW is
headquartered in New York City, NY. Additional information is
available at www.intlseas.com.
About Diamond S Shipping Inc.
Diamond S Shipping Inc. (NYSE: DSSI) owns and operates 64
vessels on the water, including 13 Suezmaxes, 1 Aframax and 50 MR
tankers. DSSI is one of the largest energy shipping companies
providing seaborne transportation of crude oil, refined petroleum
and other petroleum products. The Company is headquartered in
Greenwich, CT. More information about DSSI can be found at
www.diamondsshipping.com.
Forward-Looking Statements
This release contains forward-looking statements. In addition,
INSW or Diamond S may make or approve certain statements in future
filings with the Securities and Exchange Commission (SEC), in press
releases, or in oral or written presentations by their
representatives. All statements other than statements of historical
facts should be considered forward-looking statements. These
matters or statements may relate to the timing and likelihood of
the completion of the proposed transaction or any anticipated
synergies or other benefits therefrom, the accounting or tax
treatments of the proposed transaction, customer reactions to the
proposed transaction, any plans to issue dividends, the parties’
prospects, including statements regarding vessel acquisitions,
trends in the tanker markets, and possibilities of strategic
alliances and investments. Forward-looking statements are based on
INSW’s and Diamond S’ current plans, estimates and projections, and
are subject to change based on a number of factors. Investors
should carefully consider the risk factors outlined in more detail
in the Annual Report on Form 10-K for 2020 for INSW and Diamond S,
and in similar sections of other filings made by INSW and Diamond S
with the SEC from time to time. INSW and Diamond S assume no
obligation to update or revise any forward-looking statements.
Forward-looking statements and written and oral forward-looking
statements attributable to INSW and Diamond S or their
representatives after the date of this release are qualified in
their entirety by the cautionary statements contained in this
paragraph and in other reports previously or hereafter filed by
INSW or Diamond S with the SEC.
Additional Information and Where to Find It
This communication may be deemed to be solicitation material in
respect of the proposed transaction between INSW and Diamond S. In
connection with the proposed transaction, INSW intends to file with
the U.S. Securities and Exchange Commission (the “SEC”) a registration statement on Form S-4 that
will include a joint proxy statement of INSW and Diamond S that
also constitutes a prospectus of INSW. INSW and Diamond S may also
file other documents with the SEC regarding the proposed
transaction. This communication is not a substitute for the joint
proxy statement/prospectus, Form S-4 or any other document which
INSW or Diamond S may file with the SEC. Investors and security
holders of INSW and Diamond S are urged to read the joint proxy
statement/prospectus, Form S-4 and all other relevant documents
filed or to be filed with the SEC carefully when they become
available because they will contain important information about
INSW, Diamond S, the transaction and related matters. Investors
will be able to obtain free copies of the joint proxy
statement/prospectus and Form S-4 (when available) and other
documents filed with the SEC by INSW and Diamond S through the
website maintained by the SEC at www.sec.gov. Copies of documents
filed with the SEC by INSW will be made available free of charge on
INSW’s investor relations website at
https://www.intlseas.com/investor-relations. Copies of documents
filed with the SEC by Diamond S will be made available free of
charge on Diamond S’ investor relations website at
https://diamondsshipping.com/investor-relations.
No Offer or Solicitation
This communication is not intended to and does not constitute an
offer to sell or the solicitation of an offer to subscribe for or
buy or an invitation to purchase or subscribe for any securities or
the solicitation of any vote or approval in any jurisdiction, nor
shall there be any sale, issuance or transfer of securities in any
jurisdiction in contravention of applicable law. No offer of
securities shall be made except by means of a prospectus meeting
the requirements of Section 10 of the Securities Act of 1933, as
amended.
Participants in the Solicitation
INSW, Diamond S and certain of their respective directors and
executive officers may be deemed to be participants in the
solicitation of proxies from the holders of INSW and Diamond S
securities in connection with the contemplated transaction.
Information regarding these directors and executive officers and a
description of their direct and indirect interests, by security
holdings or otherwise, will be included in the Form S-4 and joint
proxy statement/prospectus regarding the proposed transaction (when
available) and other relevant materials to be filed with the SEC by
INSW and Diamond S. Information regarding INSW’s directors and
executive officers is available in INSW’s proxy statement relating
to its 2020 annual meeting of stockholders filed with the SEC on
April 29, 2020. Information regarding Diamond S’ directors and
executive officers is available in Diamond S’ proxy statement
relating to its 2020 annual meeting of shareholders filed with the
SEC on April 16, 2020. These documents will be available free of
charge from the sources indicated above.
1 Includes two FSOs held in a joint venture 2 Reflects the
impacts of 2 vessel sales by Diamond S during the first quarter of
2021, and excludes the $1.10 per share special dividend payable to
INSW shareholders and the estimated transaction costs relating to
the merger.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210331005393/en/
Investor Relations & Media Contact: David Siever,
International Seaways, Inc. (212) 578-1635 dsiever@intlseas.com
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