LONDON, UK: Grindrod Shipping Holdings Ltd., a global provider of maritime transportation services, has announced that it has agreed to acquire the commercial and technical management businesses of Taylor Maritime Group Limited, a leading owner and operator of dry bulk and container vessels.

The deal, which is valued at up to US$13.5 million, will bring the management of both companies’ fleets under one entity and create potential synergies across technical, commercial and accounting functions, a statement said.

The acquisition will involve Grindrod Shipping’s subsidiary Grindrod Shipping Pte. Ltd. buying all the shares of Taylor Maritime Management Limited (TMML) and Tamar Ship Management Limited (Tamar) from Taylor Maritime Group Limited and its affiliates.

TMML and Tamar are respectively the commercial and technical managers of the majority of the vessels in Taylor Maritime Investments Limited’s (TMI) portfolio, excluding those of the Grindrod group. TMI is a major shareholder of Grindrod Shipping and a related party for the purposes of the Listing Rules.

According to Grindrod Shipping, the acquisition will enable it to benefit from an increased commercial footprint and the economies of scale achievable in the management of a larger fleet of complementary vessels.

The company said that TMML and Tamar were growing rapidly before the Covid-19 pandemic and had shown continuing momentum in FY22, but this has not been sustained in the current market environment.

The company said that the fleet management strategies will be aligned and fleet resources pooled with a view to creating potential synergies across three key areas: technical management, commercial management and vessel accounting.

The deal will be financed with a combination of cash on hand and allotment of new Grindrod ordinary shares over the two years from completion. The number of consideration shares issuable is calculated based on the volume weighted average price on both NASDAQ and the Johannesburg Stock Exchange, plus 7.5 percent premium over a three month period prior to the date of entry of the Transaction agreements.

At the discretion of the buyer, in lieu of new share issuances, there is an option for any portion of the first year and second year consideration amounts to be paid in cash, at an increase of 1.10 times and 1.20 times, respectively.

TMI Chairman, Henry Strutt commented: “The TMI Board is supportive of unified management for both the TMI and Grindrod fleets. It makes a lot of sense strategically, operationally, and financially and was an important consideration in making the Grindrod investment.”

The provision of commercial ship management services and technical management services to members of TMI’s group in respect of TMI’s fleet of vessels as currently provided by TMML and Tamar respectively will continue following the Transaction without interruption.

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