Title: Eitzen Maritime Services ASA
1Eitzen Maritime Services ASA
- Acquisition of Seven Seas Shipchandlers LLC
- MUSD 50 Private Placement
June 2008
2Disclaimer
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Maritime Services ASA (the Company) exclusively
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3Acquisition summary and financing details
- Eitzen Maritime Services ASA (EMS) to acquire
Seven Seas Shipchandlers LLC (Seven Seas) - Seven Seas is the leading Middle East ship
supplier - MUSD 193 in 2007 turnover, EBITDA of MUSD 14.9
- Gross acquisition price of MUSD 115
- No interest bearing debt
- Large, modern warehouse with prime location in
Dubai included in transaction - Financing guarantee in place
- Private placement of MUSD 50 fully underwritten
by - Camillo Eitzen Co. ASA
- Senior bank debt of MUSD 50 provided by a
consortium - led by Nordea and Kauthing at LIBOR 3.25
- Two year sellers credit of MUSD 20 (non-interest
bearing) - Subsequent offering for EMS shareholders not
invited to - participate in the private placement
- EMS has an option to pay up to MUSD 5 of the
gross - acquisition price in shares
Pre transaction costs
4Transaction Summary
- Payment and delivery
-
- Time table
- Subscription period 12 June 23
June 2008 1600 CET - The company and the managers retain the right to
cancel the placement and extend or reduce the
subscription period - Payment and delivery
- Payment/delivery on or about 27 June (t4)
- Camillo Eitzen Co. ASA will lend shares to
subscribers in the private placement until New
Shares are registered in VPS - Shares tradable from or about 27 June
- Private Placement
-
- Capital requirement of approximately MUSD 115 in
total, - whereof MUSD 50 funded by bank debt and MUSD 20
by - sellers credit
- Private placement and documentation
- MUSD 50
- Fully underwritten by Camillo Eitzen Co. ASA at
NOK 3.0 per New Share - 65 of the private placement is intended for
existing shareholders of which Camillo Eitzen
Co. ASA will subscribe for its pro-rata share - Minimum subscription/allotment NOK equivalent to
EUR 50,000 - Documentation Investor presentation, term sheet
and terms of - application
- Issuer
- Subsequent Offering
-
- Details to be finalised depending on the Oslo
Stock Exchange
5High growth through value enhancing acquisitions
- EMS goal is to become the leading global ship
supply and ship management company through
acquisitions - The Seven Seas acquisition fits perfectly into
EMS ship supply division and the long-term
strategy of the company
6EMS Ship Supply
EMS Ship Management
- Supplier of food, equipment, spare parts and
services to the shipping and offshore industry
providing a good mix of products - Located in 32 ports worldwide, with 500
employees, serving 6 000 ships per year - Strong coverage of Europe/Singapore and presence
in the US - 2007 proforma revenues of MNOK 1 225, EBITDA of
MNOK 35 (before group management costs) - Ship supply profitability driven by
- Global sales key account and cross region
selling - Increased customer base and new markets
- Procurement power
- Quick response and reliability
- Infrastructure common IT platform
- EMS provides full ship management, crew
management, newbuilding project management and
shipping agencies - 120 vessels under full management and 235 vessels
under crew management - 430 employees on shore with a pool of almost 6
000 skilled seafarers - 2007 revenues of MNOK 162, EBITDA of MNOK 6
(before group management costs) - EMS Ship management has grown from local units
to global business in recent years - Ship management profitability driven by
- Cost effectiveness
- Operational efficiency and flexibility
- Competence sharing
- Access to experienced seafarers
88
12
Revenue split (2007P)
7Global coverage secured through the acquisition
Obtaining a global footprint and creating
economies of scale and synergies gt Improved
profitability, growth, balance sheet and stock
market attractiveness
8A game changer for Eitzen Maritime Services
EMS 2007 figures is proforma incl. full-year of
Provimar earnings. 2007 EBITDA include
non-recurring restructuring charges of MNOK 27.9
Economies of scale Synchronizing product
portfolios, stocking and sourcing
Creating the leading global ship supplier
company Acquisition will result in a sales growth
close to 100 within EMS ship supply division
Accretive and favourable economics 2007
EV/EBITDA of 7.1 based on year-end 2007 figures
incl. property Earnings accretive from day one
High growth region
Closes an important geographical gap for
EMS Seven Seas is the dominant Middle East ship
supplier Reputed Dubai based company in a fast
growing shipping and logistics hub
9Seven Seas Shipchandlers among the most reputed
ship chandlers
- Started in 1986 by Mr. Freddy Sidhwa, age 63
- Impressive logistics operation built in a high
growth area - Management, organization and IT systems in place
- Prime location of high standard premises with
major expansion potential - Strong corporate structure with focus on details/
precision - Revenue of MUSD 193 in 2007
- Approx. 70 of revenues generated from food
supplies - UAE accounting for around 60 of revenues
- 60/40 split between military and commercial
revenue - Strong and competent management with track record
- Committed to continue after the transaction
10Seven Seas facilities and regional sales
Dubai facilities (93.000 m2 land, 32.000 m2
buildings)
The worlds largest airport under construction
(120 mill passengers)
11Revenues split 60/40 between military and civil
Civilian sales mix (MNOK 377 in 2007)
Military sales mix (MNOK 751 in 2007)
12Synergies expected from acquisition
- Increased presence - key account and cross region
selling - Commercial vessels
- Navy and military
- IT and operations
- Increased procurement power and reduced cost of
goods
- Higher revenue
- Increased market share
- Lower cost of purchased goods
- HIGHER MARGIN RATIOS
13Positioning EMS as the biggest ship supplier
14Ship supply market
Global ship supplier market estimated to be BUSD
10-15
4-5 market share
- Underlying growth driven by expansion of merchant
and offshore fleets - New segments opening in navy and fishery
- Transparent markets with easy access to different
ship suppliers prices terms - Creates need for efficiency, purchasing power and
optimal logistics sourcing supported by a
fully integrated IT system - Increased focus on global supplier
- Global presence important to serve shipping
companies better - Key account approach
- Consolidation likely to continue
- EMS incl. Seven Seas largest player with 4-5
15High growth region
Fundamentals in place to support 10 market
growth annually
16Summary and future ambitions
- EMS has become the definite leader in ship supply
- Acquisition gives strong presence in one of the
worlds most dynamic and fast growing shipping
regions - Major leap towards the strategic goal of a global
footprint - Margins and earning boosted by the acquisition
- Favourable acquisition price
- Ship Supply EBITDA margin target has been 5 for
EMS. Management will aim to lift total ship
supply margins towards 7 as seen for Seven Seas
recently. - Organic growth expected around 10 annually
- Ship Management EBITDA margin target of 20
- Become 1 of 3 largest players within the ship
management market
17POTENTIAL RISK FACTORS- including but not
limited to
- Market risk
- Cyclicality and competition
- Geopolitical risks
- Financial risk
- Credit risk
- Tax risk
- Exchange rate risk
- Liquidity risk
- Interest rate risk
- Insurance
- Stock market risk
- Change of control
- Estimated impairment of goodwill
- Deferred tax assets and income taxes
- Provision for bad debt
- Pensions
Operational Labour relations Access to
personnel Integration Dependency on large
customers Other risks Potential dilution of
shareholders Environmental risks Limitation of
ability to make claims against the
Company following a share capital increase
Transfer restrictions Enforceability of civil
liabilities Exercise of voting rights for
nominee shareholders U.S. Shareholders and
certain other foreign shareholders may be
diluted if they are unable to participate in
future offerings
18Appendices
19Main shareholders and share price performance
- 1) Eitzen and Board members 2) management
20EMS corporate management
- Annette Malm Justad, CEO
- CEO since 1 April 2006. Previous experience as
Vice President and Head of Purchasing in Yara
International ASA, as Vice President/Fleet
Manager in Norgas Carriers AS and in various
technical and commercial positions in Norsk Hydro
ASA. - Director in Camillo Eitzen Co ASA, Aker
American Shipping ASA and Petroleum Geo Services
ASA - Holds a Master in Technology Management from
MIT/NTH and a Master in Chemical Engineering from
NTH. - Knut C. Abrahamsen, CFO
- CFO since August 2006. Previous experience as CFO
in Unitor ASA and SVP Business Processes IT in
Wilhelmsen Maritime Services AS. He has extensive
experience in the Ship Service industry through
various positions in Unitor in Norway and abroad.
- Holds a Bachelor of Science, Finance from
University of Colorado - Terje Ask-Henriksen, President EMS Ship Supply
- President EMS Ship Supply since May 2006.
Previous experience as EVP of Nera ASA and head
of Nera Satellite Communication. He has been MD
of Elopak in Norway, as well as leading positions
in Elcon Finance and Unitor Ships Service - Director of Tower Plc., London and Oset
Høyfjellshotel - Holds degrees in Engineering and Economy
- Svein Eloff Pedersen, President EMS Ship
Management - President, EMS Ship Management since 1st February
2007. Previous experience as MD of Thome Ship
Management in Singapore, and has held senior
management positions in the shipping industry
including Managing Director of Barber Ship
Management and Vice President at International
Tanker Management Ltd. - Brings with him 30 years of maritime experience,
holds a degree in Electronics/Automation
21EMS Board of Directors
- Axel C. Eitzen, Chairman
- CEO of Camillo Eitzen Co ASA and 4th generation
owner through Eitzen Holding AS - Re-established TE with 2 vessels on technical
management after creditor control in 1983 through
public listing of - Camillo Eitzen Co ASA in 2004
- Eitzen Maritime Services ASA in 2006
- Eitzen Chemicals ASA in 2006
- Chairman BoD in EMS and ECHEM, chairman Executive
Committee of Gard, director in Det Norske Veritas - Nina Udnes Tronstad
- President of Aker Kvaerner's offshore yard
at Verdal, Norway. She has long experience from
Statoil latest as Executive Vice President HES,
and as project director on Kristin field
development project - Director in Storebrand Livsforsikring AS, Aker
Exploration ASA and Proneo - Holds a degree in chemical engineering from NTH
- Mette Espedal
- Experience from Tandberg ASA, including finance,
administrative management and human resources
22EMS Board of Directors, continued
- Gunnar Reitan
- Executive chairman of Strata Marine Offshore
AS. He has long experience from the SAS Group,
Stockholm, the latest as executive vice president
and deputy CEO until August 2007. - Serves on the board of Strata Marine Offshore
AS, Northern Logistic Property ASA, Leif Høegh
Co Ltd, Spanair S.A.and Newco Airport Services
S.A. - Holds a degree in Business Administration from
Trondheim Business School, Norway. - Hilde Waaler
- Vice president of communications and public
affairs in Seadrill ASA Previous experience from
Smedvig and Fabritius Kommunikasjon. - Holds a Bachelor of Science in journalism and
public relations from University of Wyoming - Naren Bhatt
- One of the founders and Joint Chairman of Supna
Holdings (India) Pvt. Ltd. - Has more than 30 years experience in the shipping
industry with 16 years sailing experience on
board vessels. Capt. Bhatt has since 1995, along
with his partners, set up and operated various
companies in India as joint ventures with the
Eitzen Group, mainly involved in the provision of
maritime services. Mr. Bhatt is an Indian citizen
and resides in India.