SEACOR Holdings Inc. (NYSE:CKH) released the following statement
today:
This response is to
the January 11, 2021 letter from T. Rowe Price (hereinafter “T.
Rowe”) addressed to our Board of Directors regarding the pending
tender offer (the “Offer”) by American Industrial Partners (“AIP”)
to acquire 100% of the shares of SEACOR Holdings Inc. (“SEACOR”),
and explains why SEACOR disagrees with T. Rowe’s conclusions and
why the Board continues to recommend that SEACOR’s stockholders
accept the Offer.
The Offer is the
result of a robust process in which our Board engaged a financial
advisor to develop and consider a full range of strategic
alternatives, including a stand-alone strategy. This process
culminated in a competitive auction with numerous potential
financial and strategic parties involved. The Offer price reflects
active price negotiations with AIP that ultimately resulted in AIP
improving its final bid.
The SEACOR Board
looked beyond current financial performance and economic conditions
in evaluating the Offer price, and carefully considered SEACOR’s
long term prospects in assessing its value. As part of this
process, the Board undertook a detailed and exhaustive review of
SEACOR’s diverse businesses, and considered a five-year financial
plan developed by SEACOR management. The plan included a
forecast of both the expected cash flows to be generated by the
businesses and the capital expenditures necessary over this
five-year period. The review also focused on the assumptions
behind, and risks and potential upside to, the forecast.
Notably, the plan assessed the near-term weakness in financial
performance linked to the pandemic. The forecast anticipated a
strong recovery in general economic conditions and improved
fundamentals for SEACOR’s cyclical industries. The plan
presented to the Board assumed meaningful EBITDA improvement, from
$92 million in 2020 to $144 million in 2024, an 11.9% compound
annual growth rate.
In weighing all
possible strategic alternatives – including a stand-alone strategy
that might pursue acquisitions, divestitures of assets or business
lines, sale lease-backs, share repurchases or increasing use of
financial leverage – the Board concluded that selling SEACOR could
create the most value for SEACOR stockholders. Based on the
expected future performance of SEACOR’s businesses, the Board
concluded that a sale for an all-cash price of $41.50 per share
would represent an attractive price and deliver immediate value for
SEACOR’s stockholders.
In its letter, T.
Rowe expresses surprise that the Offer price does not represent a
premium to SEACOR’s book value, particularly because some assets
are carried on the Company’s books for less than might be realized
if they were sold separately. It is important to understand
that selling whole divisions or core assets is different from
disposing of a few discrete assets. The Board carefully
considered sales of assets or business lines as part of the
strategic review process and concluded that the significant time,
overhead expense and exposure to risk that would be required to do
so made it an inferior alternative to selling the entire
company.
T. Rowe’s letter
references two over age bulk carriers that survived longer than
their anticipated useful life as examples of assets that have
potential to contribute more cash flow than would be expected from
their de minimis book value. These vessels actually are an example
of why there is no predictable or “steady state” EBITDA for a
company with SEACOR’s complex asset portfolio. One of those
ships was scrapped last year after generating negative cash flows,
and the second one will most likely be scrapped this spring.
In summary, the
recommendation of the Board of Directors that SEACOR’s stockholders
accept the Offer price of $41.50 follows careful consideration of
all options for optimizing value for stockholders and is
underpinned by an in-depth analysis of future cash flows.
Charles
FabrikantChairman of the Board and CEO
* * * * *
About SEACOR Holdings
SEACOR Holdings Inc. is a diversified holding
company with interests in domestic and international transportation
and logistics, crisis and emergency management, and clean fuel and
power solutions. SEACOR is publicly traded on the New York Stock
Exchange under the symbol CKH.
About American Industrial PartnersAmerican
Industrial Partners is an operationally oriented private equity
firm that makes control investments in industrial businesses
serving domestic and global markets. The firm has deep roots in the
industrial economy and has been active in private equity investing
since 1989. To date, AIP has completed over 100 transactions and
currently has more than $7 billion of assets under management on
behalf of leading pension, endowment and financial institutions.
For more information on AIP, visit www.americanindustrial.com.
Additional Information and Where to Find ItThe
tender offer described in this communication commenced on December
18, 2020. This communication is for informational purposes only and
is neither an offer to purchase nor a solicitation of an offer to
sell shares of the Company. On December 18, 2019, an entity that
AIP controls filed with the United States Securities and Exchange
Commission (the “SEC”) a Tender Offer Statement on Schedule TO, and
the Company filed with the SEC a Solicitation/Recommendation
Statement on Schedule 14D-9. THE COMPANY’S STOCKHOLDERS AND OTHER
INVESTORS ARE URGED TO READ THE TENDER OFFER MATERIALS (INCLUDING
AN OFFER TO PURCHASE, A RELATED LETTER OF TRANSMITTAL AND CERTAIN
OTHER TENDER OFFER DOCUMENTS) AND THE SOLICITATION/RECOMMENDATION
STATEMENT BECAUSE THEY CONTAIN IMPORTANT INFORMATION WHICH SHOULD
BE READ CAREFULLY BEFORE ANY DECISION IS MADE WITH RESPECT TO THE
TENDER OFFER. The Tender Offer Statement and the
Solicitation/Recommendation Statement are available for free at the
SEC’s web site at www.sec.gov. Additional copies may be obtained
for free by contacting the Company. Free copies of these materials
and certain other offering documents will be made available by the
Company upon request by mail to SEACOR Holdings Inc., 2200 Eller
Drive, P.O. Box 13038, Fort Lauderdale, FL 33316, attention:
Investor Relations, or by phone at 1-954-523-2200, or by directing
requests for such materials to the information agent for the offer,
which will be named in the Tender Offer Statement. Copies of the
documents filed with the SEC by the Company will be available free
of charge under the “Investors” section of the Company’s internet
website at seacorholdings.com. In addition to the Offer to
Purchase, the related Letter of Transmittal and certain other
tender offer documents, as well as the Solicitation/Recommendation
Statement, the Company files annual, quarterly and current reports,
proxy statements and other information with the SEC. The Company’s
filings with the SEC are also available for free to the public from
commercial document-retrieval services and at the website
maintained by the SEC at www.sec.gov.
Cautionary Note Regarding Forward-Looking
StatementsThis communication includes “forward-looking statements”
within the meaning of the Private Securities Litigation Reform Act
of 1995. Certain statements discussed in this communication as well
as in other reports, materials and oral statements that the Company
releases from time to time constitute “forward-looking statements”
within the meaning of the Private Securities Litigation Reform Act
of 1995. Generally, words such as “anticipate,” “estimate,”
“expect,” “project,” “intend,” “believe,” “plan,” “target,”
“forecast” and similar expressions are intended to identify
forward-looking statements, including statements about the
potential benefits of the proposed transaction, the prospective
performance and outlook of the surviving company’s business,
performance and opportunities, the ability of the parties to
complete the proposed transaction and the expected timing of
completion of the proposed transaction. Such forward-looking
statements concern management’s expectations, strategic objectives,
business prospects, anticipated economic performance and financial
condition and other similar matters. Forward-looking statements are
inherently uncertain and subject to a variety of assumptions, risks
and uncertainties that could cause actual results to differ
materially from those anticipated or expected by management of the
Company. These statements are not guarantees of future performance
and actual events or results may differ significantly from these
statements. Actual events or results are subject to significant
known and unknown risks, uncertainties and other important factors,
including (i) uncertainties as to the timing and expected financing
of the tender offer; (ii) the risk that the proposed transaction
may not be completed, or if it is completed, that it will close in
a timely manner; (iii) the possibility that competing offers or
acquisition proposals for the Company will be made; (iv)
uncertainty surrounding how many of the Company’s stockholders will
tender their shares in the tender offer; (v) the possibility that
any or all of the various conditions to the consummation of the
tender offer may not be satisfied or waived; (vi) the possibility
of business disruptions due to transaction-related uncertainty and
the response of business partners to the announcement, including
customers; (vii) the occurrence of any event, change or other
circumstance that could give rise to the termination of the merger
agreement; (viii) the risk that stockholder litigation in
connection with the proposed transaction may result in significant
costs of defense, indemnification and liability; (ix) risks
relating to the COVID-19 pandemic, including the volatility the
pandemic has caused in the capital markets and the effects it has
had and could continue to have on the global economy and (x)
various other matters and factors discussed in Item 1A (Risk
Factors) of the Company’s Annual report on Form 10-K and other
reports filed by the Company with the SEC. It should be understood
that it is not possible to predict or identify all such factors.
Consequently, the preceding should not be considered to be a
complete discussion of all potential risks or uncertainties. Given
these factors, investors and analysts should not place undue
reliance on forward-looking statements. Forward-looking statements
speak only as of the date of the document in which they are made.
The Company disclaims any obligation or undertaking to provide any
updates or revisions to any forward-looking statement to reflect
any change in the Company’s expectations or any change in events,
conditions or circumstances on which the forward-looking statement
is based, except as required by law. It is advisable, however, to
consult any further disclosures the Company makes on related
subjects in its filings with the SEC, including Annual Reports on
Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on
Form 8-K (if any). These statements constitute the Company’s
cautionary statements under the Private Securities Litigation
Reform Act of 1995.
Media Contact
Stephen Pettibone / Mike DeGraff
Sard Verbinnen & Co.
SEACOR-SVC@sardverb.com
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