The same cast of characters has been in tanker circles for years. If their company goes bust, they pop up somewhere else. Sometimes they fight with each other. Sometimes they cooperate. Occasionally, they sell their entire fleets to one another (and re-emerge after their non-competes expire).
One such rare fleet deal was announced Wednesday morning: New York-based International Seaways (NYSE: INSW) will merge with Connecticut-based Diamond S Shipping (NYSE: DSSI) in an all-stock transaction, with International Seaways the surviving entity. INSW’s shares closed up 5.6% on the news, Diamond S shares 4.5%.
INSW CEO Lois Zabrocky and CFO Jeff Pribor will run the combined company, INSW shareholders will own 55.75% of the stock and get a $1.10-per-share special dividend, and INSW will hold seven of 10 board seats. Diamond S shareholders will own 44.25% and get three board seats, including one for the company’s outgoing CEO, Craig Stevenson.
Post-merger, INSW will have an implied market capitalization of around $1 billion and own 100 tankers with a total capacity of 11.3 million deadweight tons (DWT). Crude tankers will make up 71% of DWT, product tankers 29%.
It will be the third largest U.S.-listed tanker owner measured in tonnage, behind Euronav (NYSE: EURN) and Frontline (NYSE: FRO).
“It will be a very, very large company and clearly size is important,” said Stevenson on Wednesday’s conference call with analysts. “Anyone who knows me, and the other positions I’ve had in the industry, knows that I think consolidation is something that needs to be front and center”…
