Reprinted with Permission from the Q3 edition of Maritime Professional
W
orkboat and offshore marine markets have
been gaining strength over the past three
years. A resurgence of oil production in the
Gulf of Mexico has brought orders for new vessels, ma-
jor oil companies are ramping up their presence in the
region, and Gulf-oriented state governments are aligning
to encourage offshore growth. Merger and Acquisition
volumes have generally expanded in the US along with
this growth as strategic companies seek to strengthen
their positions in niche competencies (Figure 1). As al-
ways, a trickle of less strategic deals has materialized in
response to opportunistic conditions such as regulatory
changes and cases of financial distress.
A recurring theme in our quarterly studies of the ma-
rine deal-making landscape, particularly in North Amer-
ica, is the dominance of inland and offshore workboat
markets. The graph in figure 2 shows the consistency
and general outperformance of the inland/offshore pub-
lic stock indices in comparison with other marine seg-
ments, and the S&P 500 this year. Despite continuous
regulatory challenges, upward momentum in both do-
mestic oil production levels and petroleum price levels
are likely to sustain the positive trends for at least the
near future.
Recent Deals in the Oil Patch
The first deal we examine is a strategic asset deal,
as
Genesis Energy L.P.
(GEL) announced its acquisi-
tion of
Hornbeck Offshore Services’
(HOS) fleet of
oil-transport barges and tug boats for about $230 mil-
lion in July. Genesis operates a fleet of inland barges
and tugs, as well as terminal facilities and oil pipeline
systems. The addition of the Hornbeck vessels adds to
Genesis’ ocean-going capabilities and expands the com-
pany’s presence in the GOM, northeastern US and Great
Lakes region, despite some customer overlap. Shares of
publicly-traded limited partnership Genesis are up more
than 30 percent since the beginning of 2013. Hornbeck’s
shares are up more than 50 percent in the same period,
and the sale of the transport vessels dovetails with the
company’s strategic shift to focus on oil and gas explora-
tion and production.
Maritime & Offshore M&A
Regulatory, Financial & Operational changes drive
strategic deals in the crowded Workboat markets
By Harry Ward
Insights
