Tidewater acquires The Wilson Sons Group

Tidewater Inc., a Houston-based provider of offshore support vessels, has entered into an agreement to acquire Wilson Sons Ultratug Offshore for a price valuation of approximately $500 million. The acquisition aims to enhance Tidewater’s presence in the Brazilian offshore oil and gas market, which the company regards as one of the most significant globally. This stock acquisition represents a strategic expansion of Tidewater's fleet and operational capabilities in a critical region.

The transaction involves an acquisition of all outstanding shares of WSUT, a joint venture between Brazil's Wilson Sons and Chile's Ultratug. WSUT operates 22 vessels, of which 21 are currently active in Brazil, primarily serving the oil and gas sector. Post-acquisition, Tidewater will expand its total fleet to include 213 offshore support vessels, with additional capabilities in crew boats, tug boats, and maintenance vessels. Crucially, 19 of the acquired platform supply vessels are Brazilian-built, affording Tidewater operational priority in Brazilian waters under the country's regulatory framework.

Strategically, this acquisition positions Tidewater to leverage the evolving supply and demand dynamics for offshore vessels in Brazil. The deal not only broadens Tidewater's geographical reach but also aims to capitalize on the potential to import international-flagged vessels into Brazil through the Brazilian Special Registry. Additionally, the acquisition will bring $441 million in existing contract backlog to Tidewater's books. Tidewater anticipates a boost to earnings as current contracts, many set at rates below current market standards, are renegotiated or replaced.

In a market characterized by high demand for oil and gas exploration support, Tidewater's move may raise competitive pressures on other players eyeing Brazilian waters. Establishing a strong presence in Brazil with a fleet heavily comprised of locally built vessels positions the company to effectively respond to regional regulatory preferences, potentially providing a buffer against international competitors seeking to enter or expand in the market.

Looking ahead, Tidewater plans to assume WSUT’s existing debt of $261 million, mainly sourced from Brazilian lenders such as BNDES and Banco do Brasil. The company intends to novate this amortizing debt, benefiting from its cost-efficient capital structure. If the deal closes by the end of the second quarter of the next fiscal year, Tidewater projects significant revenue and margin improvements. The projected integration of WSUT's assets is seen as a step forward in Tidewater's strategic goal of solidifying its position as a leading player in the global OSV market while maintaining a favorable net leverage ratio and ensuring financial flexibility for future growth opportunities.