Boskalis to Close Dockwise Deal After Months of Deliberation

At the beginning of January Royal Boskalis Westminster N.V. had financing in place and approval from its board to offer Dockwise Ltd. an all-cash voluntary public offer for all its issued and outstanding ordinary shares. Boskalis scheduled the delivery of the offer to Dockwise for January 21.

Dockwise is a marine transport company headquartered in Breda the Netherlands that provides transport services to the dredging offshore energy and yacht industries. The company owns and operates a fleet of purpose-built semi-submersible heavy transport vessels of different concepts and designs.

With the merger Boskalis hopes to broaden its maritime services offerings in the offshore energy market and Boskalis believes the combination with Dockwise will provide opportunities for accelerated growth in that market. The two companies have worked together most recently in a joint tender for a large transport and installation (T&I) project in Australia.

In November 2012 Boskalis invited the Dockwise Board of Directors to discuss an offer originally proposing EUR 17.20 (a little more than $23) per share for a total of EUR 682 million (about $914 million) according to a November 26 press release from Boskalis.

“Combining Boskalis and Dockwise offers advantages and new opportunities for both companies. The combination creates a world-class maritime player well-positioned for the offshore energy market” CEO Peter Berdowski said in the press release. “We are convinced that the addition of Dockwise to our group will structurally create value as we have also demonstrated with SMIT. Furthermore the addition will result in a strong increase of our EBITDA.”

Boskalis said the transaction was expected to result in no or only limited effects on employment for both companies.

Before the November announcement Dockwise had already been in preliminary discussions with Boskalis. Dockwise acknowledged that Boskalis had presented its strategic rationale for the combination and that the Dockwise Board of Directors would take time to consider the offer.
Boskalis said initial discussions were positive and supported Dockwise in it systematic evaluation.

Dockwise CEO Andre Goedee said of the developments “This unsolicited approach for our company has arrived not only during a phase of successful strategic development but also during a period of intense tendering in the upstream arena…The medium term outlook in the oil and gas upstream and downstream environment clearly emphasizes that there will be opportunities to establish new backlog records for Dockwise in the near future. Our position built in our individual markets on top of our unrivalled leadership in heavy marine transport leads to the conclusion that any offer for the company should fully reflect our strong market position.”

Boskalis said the original offer at EUR 17.20 (about $23) per share was a premium of approximately 61 percent of closing price of EUR 10.66 (about $14.28) per share on November 23 an approximately 35 percent premium of an ordinary share during the last three months and an approximately 30 percent premium to the average during the last 12 months.

The main shareholder of Dockwise HAL Investments B.V. expressed its support for the transaction committing 31.7 percent of the outstanding ordinary shares upfront.

By the end of trading on November 26 Boskalis had acquired in excess of 11.5 million shares in Dockwise 29 percent of its total shares and by November 27 Boskalis had a 33 percent stake making it the largest Dockwise shareholder. Boskalis purchased those shares at an average price of EUR 17.04 (about $22.83) with a maximum price of EUR 17.20 (about $23.05) according to a Boskalis press release.

On November 29 Dockwise said it had scheduled meetings with Boskalis to clarify its offer. Additionally Dockwise said in a press release that it had taken notice of the 33 percent stake acquisition made by Boskalis and consulted with various large shareholders and several minority shareholders together representing more than 25 percent of the total share capital. Dockwise said this group had communicated their dissatisfaction with the current offer price.

In December Boskalis made a higher voluntary offer to Dockwise first at EUR 18 (about $24.12) per share increasing to EUR 18.50 (about $24.79) per share on December 21. With signed support to accept the offer from large Dockwise shareholders HAL Investments B. V. and Project Holland Deelnemingen B.V. and others holding approximately 11.1 percent of the share about 50 percent of the total shares together with the 33 percent of shares currently held by Boskalis it had secured 83.5 percent of the committed offer.

The increased offer was a premium to the November 2012 closing price the average closing price during the last three months and the average closing price during the past year of 74 percent 45 percent and 40 percent respectively.

This offer would also need official regulator approval in addition to Boskalis shareholders.

Boskalis said it intended after acquiring 100 percent of the shares to terminate the listing of the shares on the Oslo Stock Exchange and Euronext Amsterdam and propose a merger to Dockwise shareholders following the completion of the offer.

Due to the primary listing of Dockwise on the Oslo Stock Exchange the Norwegian offer rules would be applicable and the offer document would be subject to approval by the Oslo Stock Exchange. With a secondary Dockwise listing on Euronext Amsterdam Boskalis requested an exemption from the Dutch Authority for Financial Markets (AFM) for the Dutch offer rules.

Dockwise issued a statement on December 21 acknowledging the increased offer as well as its desire to reach an agreement on a merger.

On December 24 Boskalis announced that it would send the offer documents to regulators for approval in early January.
AFM also decided not to grant an exemption from the Dutch offer rules as requested by Boskalis so both Norwegian and Dutch offer rules would apply.

On January 8 Boskalis moved to take the necessary measures in order to finance the equity part of the offer securing EUR 1.3 billion (about $1.7 billion) of committed debt financing arrangements with tenors of up to five years.

The Boskalis offer values Dockwise at EUR 733 million (about $982 million) with an enterprise value of approximately EUR 1.25 billion (about $1.675 billion) and Boskalis intends to finance the offer with existing cash resources new senior debt facilities and an equity issuance.

The committed debt financing a combination of three- and five-year bank facilities and a one-year bridge facility has been arranged with ABN AMRO Bank ING Bank Rabobank and The Royal Bank of Scotland.

Boskalis announced on January 10 that its shareholders voted in favor of the proposal to issue new shares. At the Boskalis meeting two-thirds of the issued share capital was represented and more than 99 percent voted in favor.

Shareholders also authorized the Board of Management within 12 months from January 10 to issue ordinary shares up to a maximum of 10 percent of the number of ordinary shares already issued. Subject to the approval of the Supervisory Board those issued shares would be used to partly finance the offer to Dockwise.

In December Boskalis said given the necessary approval from the Oslo Stock Exchange that it would send the offer document to Dockwise shareholders on or around January 21.

Dockwise Ltd. a Bermuda incorporated company has a workforce of more than 1400 people both offshore and onshore. The group’s main commercial offices are in the Netherlands the United States and China with sales offices in Korea Australia Brazil Russia Singapore Malaysia Mexico and Nigeria. The Dockwise Yacht Transport business unit is headquartered in Fort Lauderdale and has an office in Italy. The Dockwise Shipping network is supported by agents in Norway Argentina and Italy. To support all of its services to customers the group also has three additional engineering centers in Houston Breda and Shanghai.