COLUMN | All I want for Christmas: Tidewater and its hunt for a choice gift this holiday season [Offshore Accounts]

Two other wildcard options exist. Tidewater could buy the twenty or so in service Bourbon assets in the forthcoming auctions by ICBC, and it would not require any monopoly and mergers approvals for an asset purchase of Bourbon ships in an auction, but this seems unlikely. Tidewater seems to have shown no interest in the ICBC process so far.

It could also acquire Brazilian PSV owners Wilson Sons Ultratug Offshore and its fleet of 23 PSVs, which is known to be for sale after Mediterranean Shipping Company (MSC) acquired the 50 per cent owner of the joint venture. MSC paid a total value of approximately US$1.35 billion for the whole Wilson Sons terminal and tug businesses in Brazil as well as 50 per cent of the PSV business.

Tidewater looked at CBO, another Brazilian owner, in the past and could not agree on a price. It could buy half of the joint venture from MSC or the whole company if co-owner Ultratug was also amenable to sell. Maybe.

There are also smaller options. Canada’s Horizon Offshore is rumoured to be for sale with one huge anchor handler, a PSV, and a tug joint venture. Several Middle Eastern players are being touted around, as usual. Maybe we missed something big.

Our view is that Tidewater will acquire in the United States if it acquires at all. We don’t know if Mr Kneen made a list and sent it to the North Pole for Saint Nick, but we do know that he is hunting for a target company and that Tidewater as the ability to execute.

You win again

Ms Carey says she doesn't need to hang her stocking, there upon the fireplace (ah), and Santa Claus won't make her happy with a toy on Christmas Day. I doubt Mr Kneen will be happy, either, until he has invested his US$425 million of cash in another game-changing acquisition.

Whatever the outcome in the short term, Tidewater is a force of nature in the offshore support vessel industry. It has a formidable balance sheet, the largest fleet of high-specification vessels, prodigious quantities of cash, and a reputation for ruthlessness.

Whilst we wait to hear those magic reindeer click and a press release to confirm the acquisition, perhaps the song for the moment should be The Bee Gees’ “You Win Again.”

In the last four years, Tidewater has been the biggest winner in the offshore industry, and it will likely win again this time around.

Background Reading

Tidewater’s transparency is excellent and its investor presentation updated for this month is worth a read here. Even the nonsensical slide on newbuild capital costs has been flagged to say that the US$65 million cost of a newbuild large PSV with 900 square metres of clear deck is only for a European-built vessel (hint: nobody is building PSVs in Europe any more).

We understand that a Middle Eastern buyer is looking at purchasing several Chinese-built vessels with 800 square metres of clear deck for US$32 million apiece.