International Shipholding to acquire United Maritime’s commodities transport division

14 October 2012 (Last Updated October 14th, 2012 18:30)

American water transportation company International Shipholding (ISH) will acquire United Ocean Services (UOS), a company that offers marine transportation services for dry bulk and break-bulk commodities in the US.

American water transportation company International Shipholding (ISH) will acquire United Ocean Services (UOS), a company that offers marine transportation services for dry bulk and break-bulk commodities in the US.

Both firms have signed a deal under which ISH will invest $111m in cash to acquire a 100% ownership stake in UOS, which is a subsidiary of United Maritime Group.

The new investment forms part of the company’s strategy to acquire assets that would fill niche market needs alongside expanding contracted revenue.

ISH’s chairman and chief executive officer Niels Johnsen said the company expects the acquisition to enhance its contracted revenue stream to about 68% of total revenue in 2013.

"This acquisition enables management to capitalise on a growth opportunity in a niche market that is expected to be accretive to both earnings and free cash flow. The addition of these vessels strengthens our presence and improves our operating efficiencies in the US Flag Jones Act dry bulk market," Johnsen said.

ISH plans to operate UOS as a separate subsidiary and retain its current management team.

The acquisition, subject to regulatory approvals and customary closing conditions, is likely to be completed in the fourth quarter of 2012.

The company plans to fund the transaction through debt financing from its core bank group and will also explore additional sources of financing.