SED Energy Holdings (ENH) M&A announcement summary

Deal rationale and strategic fit

• Combination creates a larger, diversified offshore services platform with enhanced scale, cash generation, and growth potential, enabling incremental growth opportunities in existing and adjacent markets.

• The joint entity will operate across deepwater drilling, tender-assist drilling, and seismic vessels, expanding its international footprint in Brazil and Southeast Asia.

• Ventura Offshore becomes a third vertical, adding deepwater drilling expertise and exposure to the Brazilian market, complementing the existing portfolio.

• The platform is positioned to act as a consolidator in current and adjacent markets, leveraging specialist teams and global presence.

• Merges complementary businesses, increasing scale, reducing risk, and improving access to financing and capital markets.

Financial terms and conditions

• All-share transaction: Ventura Offshore shareholders receive 605 million new shares in Energy Holdings, representing 45% of the combined entity post-closing, at a 5.50x exchange ratio, subject to adjustments.

• DNB Bank ASA has committed a USD 250 million bridge facility and extended a USD 30 million revolving credit facility to support refinancing and provide flexibility.

• Pro forma equity value of the combined company is approximately USD 1 billion, with a market capitalization around USD 1 billion.

• The combined portfolio has a contracted revenue backlog of USD 1.3 billion, providing strong earnings visibility and long-duration contract coverage beyond 2029.

Synergies and expected cost savings

• Significant financial synergies expected from refinancing Ventura's amortizing bond with non-amortizing debt at a lower cost of capital, increasing distribution capacity.

• Refinancing is projected to free up USD 40 million in liquidity, enabling increased dividend payments.

• Optimizing balance sheet and capital structure to extract further financial synergies.

• Limited operational synergies, with some overlap in Southeast Asia.