Eitzen Maritime Services ASA

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Eitzen Maritime Services ASA

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Title: Eitzen Maritime Services ASA


1
Eitzen Maritime Services ASA
  • Acquisition of Seven Seas Shipchandlers LLC
  • MUSD 50 Private Placement

June 2008
2
Disclaimer
  • This presentation and its enclosures and
    appendices (hereinafter jointly referred to as
    the Presentation has been prepared by Eitzen
    Maritime Services ASA (the Company) exclusively
    for information purposes. This Presentation has
    not been reviewed or registered with any public
    authority or stock exchange. Recipients of this
    Presentation may not reproduce, redistribute or
    pass on, in whole or in part, the Presentation to
    any other person.
  • The distribution of this Presentation and the
    offering, subscription, purchase or sale of
    securities issued by the Company in certain
    jurisdictions is restricted by law. Persons into
    whose possession this Presentation may come are
    required by the Company to inform themselves
    about and to comply with all applicable laws and
    regulations in force in any jurisdiction in or
    from which it invests or receives or possesses
    this Presentation and must obtain any consent,
    approval or permission required under the laws
    and regulations in force in such jurisdiction,
    and the Company shall not have any responsibility
    or liability for these obligations. This
    Presentation does not constitute an offer to sell
    or a solicitation of an offer to buy any
    securities in any jurisdiction to any person to
    whom it is unlawful to make such an offer or
    solicitation in such jurisdiction.
  • NEITHER THIS PRESENTATION NOR ANY PART OF COPY OF
    IT MAY BE TAKEN OR TRANSMITTED INTO THE UNITED
    STATES OR DISTRIBUTED, DIRECTLY OR INDIRECTLY, IN
    THE UNITED STATES. THE SHARES OF THE COMPANY HAVE
    NOT AND WILL NOT BE REGISTERED UNDER THE U.S.
    SECURITIES ACT OF 1933, AS AMENDED OR ANY STATE
    SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD
    WITHIN THE UNITED STATES. ACCORDINGLY, SHARES IN
    THE COMPANY WILL ONLY BE OFFERED OR SOLD OUTSIDE
    THE UNITED STATES IN OFFSHORE TRANSACTIONS IN
    ACCORDANCE WITH REGULATION S UNDER THE U.S.
    SECURITIES ACT OF 1933, AS AMENDED. NONE OF THE
    COMPANYS SHARES HAS BEEN OR WILL BE QUALIFIED
    FOR SALE UNDER THE SECURITIES LAWS OF ANY
    PROVINCE OR TERRITORY OF CANADA. THE COMPANYS
    SHARES ARE NOT BEING OFFERED AND MAY NOT BE
    OFFERED OR SOLD, DIRECTLY OR INDIRECTLY, IN
    CANADA OR TO OR FOR THE ACCOUNT OF ANY RESIDENT
    OF CANADA IN CONTRAVENTION OF THE SECURITIES LAWS
    OF ANY PROVINCE OR TERRITORY THEREOF.IN RELATION
    TO THE UNITED KINGDOM, THIS PRESENTATION AND ITS
    CONTENTS ARE CONFIDENTIAL AND ITS DISTRIBUTION
    (WHICH TERM SHALL INCLUDE ANY FORM OF
    COMMUNICATION) IS RESTRICTED PURSUANT TO SECTION
    21 (RESTRICTIONS ON FINANCIAL PROMOTION) OF THE
    FINANCIAL SERVICES AND MARKETS ACT 2000
    (FINANCIAL PROMOTION) ORDER 2005. IN RELATION TO
    THE UNITED KINGDOM, THIS PRESENTATION IS ONLY
    DIRECTED AT, AND MAY ONLY BE DISTRIBUTED TO,
    PERSONS WHO FALL WITHIN THE MEANING OF ARTICLE 19
    (INVESTMENT PROFESSIONALS) AND 49 (HIGH NET WORTH
    COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC.)OF
    THE FINANCIAL SERVICES AND MARKETS ACT 2000
    (FINANCIAL PROMOTION) ORDER 2005 OR WHO ARE
    PERSONS TO WHOM THE PRESENTATION MAY OTHERWISE
    LAWFULLY BE DISTRIBUTED.
  • The information contained herein has been
    prepared to assist outside parties in making
    their own evaluation of the Company and does not
    purport to contain all information that such
    interested parties may desire. In all cases,
    interested parties should conduct their own
    investigation and analysis of the Company, its
    business, prospects, results of operations and
    financial condition and are welcome to do so by
    contacting the Company any time before closing.
    No party has made any kind of independent
    verification of any of the information set forth
    herein, including any statements with respect to
    projections or prospects of the Business or the
    assumptions on which such statements are based,
    and does not undertake any obligation to do so.
    The contents of this Presentation are not to be
    construed as legal, business, investment or tax
    advice. Each recipient should consult with its
    own legal, business, investment and tax adviser
    as to legal, business, investment and tax advice.
  • There may have been changes in matters which
    affect the Company subsequent to the date of this
    Presentation. Neither the issue nor delivery of
    this Presentation shall under any circumstance
    create any implication that the information
    contained herein is correct as of any time
    subsequent to the date hereof or that the affairs
    of the Company have not since changed and the
    Company does not intend, and does not assume any
    obligation, to update or correct any information
    included in this Presentation.
  • This Presentation includes and is based on, among
    other things, forward-looking information and
    statements. Such forward-looking information and
    statements are based on the current expectations,
    estimates and projections of the Company or
    assumptions based on information available to the
    Company. Such forward-looking information and
    statements reflect current views with respect to
    future events and are subject to risks,
    uncertainties and assumptions. The Company cannot
    give any assurance as to the correctness of such
    information and statements.
  • An investment in the Company involves a high
    degree of risk, and several factors could cause
    the actual results, performance or achievements
    of the Company to be materially different from
    any future results, performance or achievements
    that may be expressed or implied by statements
    and information in this Presentation, including,
    among others, risks or uncertainties associated
    with market segments, development, growth
    management, financing, market acceptance and
    relations with customers, and, more generally,
    general economic and business conditions, changes
    in domestic and foreign laws and regulations,
    taxes, changes in competition and pricing
    environments, fluctuations in currency exchange
    rates and interest rates and other factors.
    Should one or more of these risks or
    uncertainties materialise, or should underlying
    assumptions prove incorrect, actual results may
    vary materially from those described in this
    document.
  • The Company's board of directors hereby confirm
    that to the best of their knowledge the
    information regarding the Company contained in
    the Presentation as of its date is in accordance
    with the facts and contains no omissions likely
    to affect the contents of the Presentation, and
    which may materially influence the assessment of
    the Company as an investment object or the
    valuation of the shares in the Company. Market
    conditions and future prospects have been
    appraised on the basis of best judgment.
  • Fondsfinans ASA, Kaupthing ASA and Orion
    Securities AS does not accept any responsibility
    for the information contained in the
    Presentation.
  • This Presentation is subject to Norwegian law,
    and any dispute arising in respect of this
    Presentation is subject to the exclusive
    jurisdiction of the Norwegian courts.

3
Acquisition 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
4
Transaction 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

5
High 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

6
EMS 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)
7
Global 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
8
A 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
9
Seven 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

10
Seven Seas facilities and regional sales
Dubai facilities (93.000 m2 land, 32.000 m2
buildings)
The worlds largest airport under construction
(120 mill passengers)
11
Revenues split 60/40 between military and civil
Civilian sales mix (MNOK 377 in 2007)
Military sales mix (MNOK 751 in 2007)
12
Synergies 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

13
Positioning EMS as the biggest ship supplier
14
Ship 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

15
High growth region
Fundamentals in place to support 10 market
growth annually
16
Summary 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

17
POTENTIAL 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
18
Appendices
19
Main shareholders and share price performance
  • 1) Eitzen and Board members 2) management

20
EMS 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

21
EMS 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

22
EMS 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.
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