New York-listed Eneti has made a major move into the market for wind turbine installation vessels (WTIVs) with a $600m acquisition of one of the most experienced operators in the sector.
The deal to take over Seajacks International of the UK will give current holders of Scorpio Group-backed Eneti 58% of the combined company. Seajacks investors will take 42%.
Eneti, the former Scorpio Bulkers, quickly moves from an upstart outfit with no WTIV track record or vessels into an owner with both ships on the water and a decade of market experience.
UK-based Seajacks was founded in 2006 and calls itself the largest owner of purpose-built, self-propelled WTIVs in the world, with a pedigree for installing wind turbines and foundations dating back to 2009.
The buy also answers the question of how Eneti can avoid a period of negative earnings as it waits for its first WTIV newbuilding to be delivered in 2024 from Daewoo Shipbuilding & Marine Engineering of South Korea.
Seajacks is owned by three Japanese entities: 50% by Marubeni, 45% by Innovation Network Corp of Japan (INCJ) and 5% by Mitsui OSK Lines .
Eneti is paying for the acquisition with 8.13m shares, $299m of assumed net debt, $74m of newly issued redeemable notes and $12m of cash. The shares include 7.4m common shares and 700,000 preferential shares.
“This transaction reflects the biggest step yet in our transformation into a world-class contractor for offshore wind,” said Eneti chief executive Emanuele Lauro.
“Seajacks is a market leader with a fleet of five advanced jack-up vessels. Via this combination we will gain the valuable support of Seajacks shareholders who now become Eneti shareholders. Moreover what is central to this combination is the committed and experienced professionals who join our team.”
Eneti chief operating officer Cameron Mackey hailed Seajacks’ “global platform”, which includes operations in Asia and in the North Sea.
“We have created one of the world’s largest offshore wind turbine owner-operators and the only company of its kind listed on the New York Stock Exchange,” Mackey said.
Seajacks is expected to have Ebitda of about $125m in 2021on $224m in projected revenues, of which 89% are revenues relating to existing contracted employment.
The sale of Eneti's final five bulkers to the private Scorpio Group is believed to involve the transfer of sale and leaseback arrangements.
The vessels are the 84,900-dwt SBI Samba and SBI Rumba (both built 2015), the 61,000-dwt SBI Echo (built 2015) and the 61,300-dwt SBI Tango (built 2015) and SBI Hermes (built 2016).
“Eneti is the right partner for our exceptional Seajacks team. Combining Eneti with Seajacks will deliver strategic and financial value to all shareholders,” said Horishi Tachigami of Marubeni Corp.
“Marubeni as well as INCJ and Mitsui OSK Lines are delighted to become shareholders in Eneti and participate in the next phase of expansion in the fast-developing offshore wind sector.”
Tachigami and Peter Niklai of INCJ are to join the Eneti board.
The acquisition will trigger “change of control provisions” in the contracts of certain unnamed Eneti executives in a lump sum amount of $30m, but current executive employment contracts will be amended such that executives forgo salaries for three years and bonuses for four.
Seajacks’ flagship vessel — the Samsung Heavy Industries-built Seajacks Scylla (built 2015) — is employed in Asia.
Its Seajacks Zaratan (built 2012) works in the Japanese market under the Japanese flag, while three NG2500X specification units — the Seajacks Hydra (built 2014), and Seajacks Kraken and Seajacks Leviathan (both built 2009)— operate in the North Sea.
As part of the Seajacks acquisition, Eneti has received a commitment from ING Bank for a non-amortising revolving credit facility of $60m with maturity in August 2022 and a margin of 245 basis points over Libor.
Eneti, called Scorpio Bulkers at the time, stunned the market last August when it announced it was giving up the dry bulk market in favour of a future in green energy.
The company revealed a letter of intent with DSME for a WTIV slated to cost between $265m and $290m, with delivery set for 2023.
Eneti updated the project in May, saying it had signed a contract with DSME with a new price of $330m, and a revised delivery date of 2024.
The shipowner also revealed it was in advanced discussions with several US shipyards to build a Jones Act-compliant WTIV.
In the meantime, Eneti set about selling off its 50-strong bulker fleet, dealing all but five Japanese-built units by May.
In Tuesday’s announcement of the Seajacks deal, Eneti also disclosed that it had now reached an agreement to sell the five bulkers to affiliates of private Scorpio Holdings for $16m.
