Tidewater (TDW) M&A announcement summary

Deal rationale and strategic fit

• Acquisition expands presence in Brazil, increasing fleet from 6 to 28 vessels and adding 22 PSVs, 19 of which are Brazilian-built, targeting the world's largest offshore supply vessel market.

• Establishes a leading position in the Brazilian PSV/OSV market, leveraging robust local demand and regulatory advantages for Brazilian-flagged vessels.

• Nearly 90% of the acquired fleet is Brazilian-built, providing advantages in local tenders and regulatory status.

• Enables use of Brazilian Special Registry (REB) tonnage rights, allowing import of international-flagged vessels under favorable regulations.

• Enhances fleet quality and age profile, with a pro forma fleet of 213–231 OSVs averaging 13.6 years.

Financial terms and conditions

• All-cash transaction valued at $500 million, funded by cash on hand and assumption of $261 million in debt, with debt provided by BNDES and Banco do Brasil.

• Debt has a weighted average cost of 3.6% and amortizes through 2035, with no significant maturity spikes.

• Net leverage expected to remain below 1.0x post-closing, with no need to access revolving credit.

• WSUT's fleet delivers $441 million in backlog, with contracts expected to roll over at higher market rates.

• Wilson Sons expected to generate $220 million in revenue and 58% gross margin in the first 12 months post-close; annual G&A expense projected at $14 million.

Synergies and expected cost savings

• Transaction expected to deliver significant accretion to 2026E and 2027E earnings and free cash flow per share.

• No significant G&A synergies assumed; $14 million G&A aligns with current per-vessel run rate.

• Built-in low-cost, long-duration financing provides a cost of capital advantage.

• Potential for future revenue synergies from REB capacity, not included in current projections.