Hornbeck Offshore Services to sell fleet of nine ocean-going tugs and nine double-hulled tank barges to Genesis Marine
Hornbeck Offshore Services to Sell Downstream Tug and Tank Barge Fleet for $230 Million
Louisiana-based Hornbeck Offshore Services (NYSE: HOS) announced Monday that it has entered into an agreement to sell the company’s Downstream segment fleet of tugs and tank barges to Genesis Marine, LLC, an affiliate of Genesis Energy L.P. (NYSE:GEL), for $230 million.
Hornbeck says that the proceeds of the transaction, including a $23 million deposit from Genesis, will be used for general corporate purposes, which may include for the acquisition, construction or retrofit of vessels.
The vessels included in the deal are Hornbeck’s active fleet of nine ocean-going tugs and nine double-hulled tank barges, which operate primarily in the northeastern U.S. and the U.S. Gulf of Mexico.
“Given the substantial pending growth in our Upstream fleet over the next few years as a result of previously announced newbuild and retrofit programs and any incremental organic or acquisitive growth that may arise, we believe that the timing is right to divest of our non-core Downstream segment in order to strategically focus our energies on our Upstream core business,” said Todd M. Hornbeck, the Company’s Chairman, President and Chief Executive Officer. “Due to the recent recovery in Downstream market conditions since the financial collapse of 2008, we were able to monetize our active TTB fleet at what we believe to be a very fair price – above our original investment in these assets – and believe that the redeployment of that capital in our Upstream business will unlock value for our shareholders. Our ability to enter into this agreement is a testament to the excellent operational track record and quality of our valued Downstream workforce that we and Genesis are fortunate to have in our future.”
The transaction expected to close by the end of the third quarter of 2013.
Hornbeck says that they plan to enter into transition service agreements with Genesis in order to ensure a smooth transition of operations and services for both employees and customers.
Hornbeck Offshore Services provides technologically advanced, new generation offshore supply vessels primarily in the U.S. Gulf of Mexico and Latin America, and is a leading short-haul transporter of petroleum products through its coastwise fleet of ocean-going tugs and tank barges, primarily in the northeastern U.S. and the U.S. Gulf of Mexico. The company currently owns a fleet of 76 vessels primarily serving the energy industry and has 23 additional high-spec Upstream vessels under construction for delivery on various dates through 2016.