LONDON, UK: Taylor Maritime Investments Limited (TMI), through a wholly-owned subsidiary Good Falkirk (MI) Limited, has entered into a transaction implementation agreement to acquire Grindrod Shipping Holdings, a global provider of maritime transportation services, predominantly in the drybulk sector.
Under the terms of the offer, shareholders of Grindrod Shipping will be entitled to receive US$21.00 in cash for each share, while Grindrod has agreed to declare and pay a special dividend of US$5.00 per share translating into aggregate transaction value of US$26 per share valuing Grindrod Shipping at approximately US$506 million.
Good Falkirk, a wholly-owned subsidiary of Taylor Maritime Investments, first acquired shares in Grindrod Shipping in Q4 2021. Through additional purchases in Q4 2021 the offeror established an approximately 26% ownership position in the company and designated Paul Charles over to serve on the company’s board of directors.
On 25 August 2022, TMI delivered to Grindrod a non-binding indicative proposal to acquire 100% of the outstanding shares of the Company not already owned by Offeror through the Proposed Transaction.
TMI believes the combination would enable the Enlarged Group’s chartering and technical management functions to realise additional value through the enhanced scale and utilization of the combined fleet and charter book.
The combined fleet will mean that the Enlarged Group’s assets are closer to its customers around the world, enabling TMI and Grindrod’s experienced chartering teams to create additional value through positioning advantages, and the technical teams to make economic, bulk purchases of spares.
The Enlarged Group is expected by TMI to achieve enhanced realised revenue and cost unit economics that are not available to either Taylor Maritime Investments or Grindrod on a standalone basis.
TMI expects that the Enlarged Group will maintain a conservative long-term capital structure. In order to fund the Offer, TMI has arranged an acquisition facility. At 100% acceptances, TMI will exceptionally increase its debt to gross assets ratio to 40% and is committed to reducing this to no more than 25% within 18 months, with the new facility significantly reduced or eliminated within that timeframe.
TMI intends to continue to implement its strategy of employing its ships primarily on period time-charters, utilizing a mix of duration, including short term Charters (less than 6 months), medium term Charters (more than 6 months) and long-term Charters (greater than a year) which are expected to benefit from staggered renewals of an even larger fleet, with a view to flattening the income curve.
The combined fleet is expected by TMI to generate robust free cash flow, which, together with proceeds from vessel sales, as part of overall fleet renewal strategy, will be used to repay debt.
TMI is an internally managed shipping company listed on the Premium Segment of the Official List, its shares trading on the Main Market of the London Stock Exchange since May 2021 (the IPO). TMI specialises in the acquisition and chartering of vessels in the Handysize and Supramax bulk carrier segments of the global shipping sector.