SBLK - Star Bulk and Eagle Bulk Shipping to Combine Creating a Global Leader in Dry Bulk Shipping | Benzinga
Leading, Diversified and Scrubber-Fitted Fleet of 169 Owned Vessels
Best-in-Class Commercial and Technical Operations and Expanded Global Presence Spanning Europe, Asia and North America
Expect to Realize Meaningful Financial Benefits from Significant Cost and Revenue Synergies
Companies to Host Conference Call Today at 5:30 p.m. ET
ATHENS, Greece and STAMFORD, Conn., Dec. 11, 2023 (GLOBE NEWSWIRE) -- Star Bulk Carriers Corp. ("Star Bulk") (NASDAQ:SBLK), a global shipping company focusing on the transportation of dry bulk cargoes, and Eagle Bulk Shipping Inc. (NYSE:EGLE) ("Eagle"), one of the world's largest owner-operators within the midsize dry bulk vessel segment, today announced that the companies have entered into a definitive agreement to combine in an all-stock merger on a Net Asset Value to Net Asset Value ("NAV") basis with a pro forma market capitalization of approximately $2.1 billion1.
Under the terms of the agreement, which was unanimously approved by the boards of directors of both companies, Eagle shareholders will receive 2.6211 shares of Star Bulk common stock for each share of Eagle common stock owned. This represents a total consideration of approximately $52.60 per share, a 17% premium based on Eagle's closing share price of $44.85 on December 8, 2023. Upon the close of the transaction, Star Bulk and Eagle shareholders will own approximately 71% and 29% of the combined company on a fully diluted basis, respectively.
Petros Pappas, Chief Executive Officer of Star Bulk, commented, "Bringing together Star Bulk and Eagle will create a global leader in dry bulk shipping with a large, diversified, scrubber fitted fleet. Together we will benefit from greater scale with 169 owned vessels, generating meaningful synergies and building an even stronger financial profile. We will leverage both companies' technical and commercial fleet management capabilities to optimize performance, deliver on our health, safety, and environmental objectives and maximize earnings potential. With a well-capitalized balance sheet, we aim to continue delivering strong cash returns to shareholders while investing in emission reduction technologies as we continue to pursue growth over the long term. We look forward to working with the talented Eagle team to successfully integrate the two companies."
Gary Vogel, Eagle Chief Executive Officer, said, "We are very excited to be joining forces with Star Bulk, uniting two best-in-class companies, both commercially and operationally. We are bringing together two highly complementary organizations and are confident that this accretive merger with Star Bulk will unlock significant value for Eagle shareholders, including the opportunity to participate in the long-term upside of the combined company."
Strategic and Financial Benefits
- A Leading, Diversified Fleet of Scrubber-Fitted Vessels with Greater Scale. The combined company will be the largest U.S. listed dry bulk shipping company with a combined fleet of 169 owned-vessels on a fully delivered basis, 97% of which are fitted with Exhaust Gas Cleaning Systems ("scrubbers"), ranging from Newcastlemax/Capesize to Supramax/Ultramax vessels and a global market presence.
- Best-in-Class Technology-Driven Operations and Management. Both companies employ fully integrated ship management operations across commercial and technical management, and Star Bulk will leverage Eagle's expertise in the Supramax/Ultramax sector to improve upon utilization and performance.
- Strong Financial Profile and Capital Return Framework: The combined company is expected to have combined liquidity2 of nearly $420 million, as of September 30, 2023, and net leverage of approximately 37%3. Both companies expect to maintain their respective dividend policies until the transaction is completed. Following close, the combined company expects to maintain Star Bulk's current dividend policy.
- Significant Cost and Revenue Synergies. The transaction is expected to generate at least $50 million in annual cost and revenue synergies within 12-18 months following close through commercial operations integration and economies of scale, including reductions in general and administrative expenses.
- More Attractive Investment Proposition: The combined company will have significantly increased pro forma market capitalization and expected trading liquidity in the dry bulk sector. With increased size and liquidity, the combined company expects to reduce its cost of capital.
Leadership, Governance and Headquarters
The combined company will be led by the current management team of Star Bulk and will be joined by certain senior executives of Eagle. Upon close, Mr. Pappas will serve as CEO of the combined company and Spyros Capralos, current Chairman of Star Bulk, will serve as Chairman of the combined company's Board. One member of the Eagle Board will join the Star Bulk Board at closing.
The combined company will operate as Star Bulk Carriers Corp. and will be headquartered in Athens, Greece, while maintaining offices in Stamford, Connecticut; Singapore; Copenhagen; and Limassol.
Timing and Approvals
The transaction is expected to close in the first half of 2024, subject to approval by Eagle shareholders, receipt of applicable regulatory approvals and satisfaction of other customary closing conditions.
Conference Call and Webcast
Star Bulk and Eagle will host a joint conference call and webcast today at 5:30 p.m. ET to discuss the transaction. The conference call can be accessed by dialing 800-225-9448 within the U.S. and 203-518-9708 for all non-U.S. locations. The confirmation code is 75612.
A live webcast of the conference call will be accessible here: https://event.on24.com/wcc/r/4436402/E60ACDC052D0D01D04A91F235C5D3125. The webcast link and associated presentation materials ...