Teekay Tankers has moved to bolster its fleet with the acquisition of Oslo-listed Tanker Investments (TIL) in a share-for-share merger.
Teekay Corporation and Teekay Tankers set up Tanker Investments in 2014 to benefit from cyclical fluctuations in the tanker market. It now has a fleet of 10 suezmax tankers, 6 aframax tankers and 2 LR2 product tankers.
Teekay Tankers currently has an 11.3% stake in TIL, and is acquiring all remaining issued and outstanding shares of TIL at an exchange ration of 3.30 Teekay Tankers Class A common shares for each TIL common share. It will also assume around $350m of TIL’s long-term debt, which includes two revolving credit facilities and a term loan.
Kevin Mackay, president and CEO of Teekay Tankers, commented: “We believe Teekay Tankers presents an even more compelling investment in the mid-size tanker space with a stronger financial foundation, a much larger, younger fleet with which to service our customers globally, and our now fully-integrated tanker operations, positioning our company as the leading tanker brand in our segment.
“The merger with Tanker Investments is expected to be immediately accretive to earnings per share, further strengthens the company’s financial position, and better positions Teekay Tankers to take advantage of the next tanker market upturn.“
Separately, Teekay Tankers is acquiring the remaining 50 percent interest in Teekay Corporation’s commercial and technical management operations, Teekay Operations, for around $27m. This will consolidate all commercial and technical management operations under Teekay Tankers.
Teekay Operations already provides commercial and technical management for TIL’s vessels, and should see a seamless integration of the two fleets.
The merger has been approved by both boards and is expected to close in the third quarter of 2017.
Upon completion of the deal Teekay Tankers will have combined total assets of $2.4bn. The fleet of 62 tankers, made up of 30 suezmaxes, 22 aframaxes, 9 LR2 product tankers and one 50 percent-owned VLCC.