MONACO, Aug. 26, 2021 – In a move set to reshape the landscape of U.S. publicly-listed shipping companies, Navios Maritime Partners L.P. (NYSE: NMM), a prominent international owner and operator of dry cargo vessels, has announced a definitive agreement to merge with Navios Maritime Acquisition Corp. (NYSE: NNA), an international player in tanker vessel operations. This strategic transaction will see Navios Acquisition shareholders receive 0.1275 of a common unit of Navios Maritime Partners for each outstanding common share of Navios Acquisition, marking a significant expansion and diversification for Navios Maritime Partners.
Angeliki Frangou, Chairwoman and Chief Executive Officer, highlighted the transformative nature of this merger, stating, “We are announcing a transformative transaction. The combined entity will be the largest U.S. publicly-listed shipping company in terms of vessel count, boasting 15 vessel types across three key segments and serving over 10 diverse end markets. With approximately one-third of our fleet dedicated to each of the dry bulk, containership, and tanker segments, we are strategically positioned to mitigate sector-specific cyclicality. This combination is expected to create a stronger, more resilient organization, enabling us to capitalize on a wider range of industry opportunities and deliver consistent returns to our stakeholders throughout market cycles.”
This merger underscores Navios Maritime Partners‘ commitment to growth and strategic diversification, building upon a proven track record of successful integrations. The company anticipates a seamless execution of this combination, leveraging its experience in previous roll-up transactions.
Key Benefits of the Navios Maritime Partners and Navios Acquisition Combination
The merger between Navios Maritime Partners and Navios Acquisition is projected to yield substantial benefits, reinforcing Navios Maritime Partners‘ position as a leader in the maritime industry:
- Creation of the Largest U.S. Publicly-Listed Shipping Company: The combined entity will command a fleet of over 140 vessels, totaling approximately 15 million deadweight tons. This extensive fleet operates across dry bulk, containership, and tanker segments, utilizing 15 different vessel types and serving more than 10 end markets. This scale positions Navios Maritime Partners as the undisputed leader in the U.S. public shipping sector.
- Enhanced Operational Scale and Diversification: With a balanced operational presence across dry bulk, containership, and tanker sectors, Navios Maritime Partners achieves significant diversification. This strategic balance mitigates risks associated with the volatility of individual shipping segments.
- Mitigation of Segment Volatility: Diversification across three distinct operational segments, each driven by unique market fundamentals, allows Navios Maritime Partners to reduce exposure to idiosyncratic segment volatility, ensuring more stable and predictable performance.
- Optimized Strategic Flexibility: The increased scale and diversification provide management with greater flexibility to strategically allocate resources and capitalize on opportunities within each sector. This includes the ability to adjust charter terms based on specific segment dynamics, maximizing profitability for Navios Maritime Partners.
- Annual Cost Reductions: The merger is expected to generate annual cost reductions through operational efficiencies and economies of scale, further enhancing the financial performance of Navios Maritime Partners.
- Maintained Financial Flexibility: The combined entity will maintain a modest leverage ratio of approximately 35%, based on average broker reports from August 20, 2021. Coupled with a substantial collateral value base, Navios Maritime Partners retains significant financial flexibility for future growth and debt management.
- Improved Credit Profile: Increased cash retention resulting from the merger will bolster Navios Maritime Partners‘ credit profile, supporting continued deleveraging and future growth initiatives.
- Expanded Equity Market Capitalization and Investor Appeal: The merger is anticipated to increase equity market capitalization and trading depth, making Navios Maritime Partners a more attractive investment opportunity for investors seeking exposure to the global economy and the shipping industry.
- Sustained and Growing Returns for Unitholders: Navios Maritime Partners is committed to maintaining and ultimately growing returns to unitholders of the combined company, ensuring long-term value creation.
- Continued Participation for Navios Acquisition Shareholders: Navios Acquisition’s shareholders will gain the opportunity to participate in the combined company’s future success and benefit from the market upside as unitholders of Navios Maritime Partners.
The current estimated value of the combined company’s vessel fleet is approximately $4.2 billion, based on average publicly available broker reports. The enterprise value is estimated at around $2.25 billion. With a robust contracted revenue pipeline of $1.6 billion and approximately 47,634 available days in 2022, Navios Maritime Partners is ideally positioned to leverage the strong dry cargo markets and any potential recovery in the tanker market.
Merger Details and Consideration for Navios Maritime Partners and Navios Acquisition
Under the definitive transaction agreement, Navios Acquisition will merge into a subsidiary of Navios Maritime Partners, becoming a wholly-owned subsidiary. Navios Acquisition shareholders will receive 0.1275 of a common unit of Navios Maritime Partners for each Navios Acquisition share. Based on Navios Maritime Partners’ closing price on August 24, 2021, the merger consideration equates to a per share value of $3.40, representing a premium for Navios Acquisition shareholders.
The exchange of shares is expected to be a tax-free transaction for U.S. federal income tax purposes for Navios Acquisition shareholders. The combined company will operate under the leadership of the existing board of directors of Navios Maritime Partners.
Redemption of Navios Acquisition Ship Mortgage Notes by Navios Maritime Partners
As part of the transaction, Navios Acquisition has redeemed all of its outstanding Ship Mortgage Notes due November 15, 2021. This redemption was funded through a combination of proceeds from the sale of newly issued Navios Acquisition common shares to Navios Maritime Partners and newly arranged secured term loan financings.
Navios Maritime Partners provided Navios Acquisition with a $45.0 million interim working capital facility in connection with the Transaction, demonstrating Navios Maritime Partners‘ commitment to ensuring a smooth transition.
Approvals and Closing Timeline
The transaction has received unanimous approval from the special committee and the full board of directors of both Navios Acquisition and Navios Maritime Partners. Navios Partners, through its equity issuance, now owns approximately 62.4% of Navios Acquisition’s outstanding common shares and has committed to voting in favor of the merger, ensuring shareholder approval.
The merger is anticipated to close in the fourth quarter of 2021, subject to customary closing conditions, including the effectiveness of a registration statement and shareholder approval from Navios Acquisition.
Conference Call Information
Navios Maritime Partners hosted a conference call on Tuesday, August 31, 2021, to discuss the details of this transformative transaction.
Advisors
Several leading financial and legal advisors played crucial roles in facilitating this merger, representing both Navios Acquisition and Navios Maritime Partners.
Important Information for Investors
Investors are encouraged to review the registration statement and related prospectus filed with the Securities and Exchange Commission (SEC) for comprehensive information regarding Navios Maritime Partners common units and the merger. These documents are available for free on the SEC’s website (www.sec.gov).
About Navios Maritime Partners L.P.
Navios Maritime Partners L.P. (NYSE: NMM) is a publicly traded master limited partnership focused on owning and operating dry cargo vessels. For more information, please visit the Company’s website: www.navios-mlp.com.
About Navios Maritime Acquisition Corporation
Navios Acquisition (NYSE: NNA) specializes in owning and operating tanker vessels for the transportation of petroleum products and bulk liquid chemicals. For more information, please visit: www.navios-acquisition.com.
Forward-Looking Statements
This communication includes forward-looking statements regarding the proposed transaction and the future success of Navios Maritime Partners. These statements are subject to risks and uncertainties, and actual results may differ. Investors are cautioned against undue reliance on these statements, which are based on current expectations and subject to change.
Contacts
Navios Maritime Partners L.P.
+1 (212) 906 8645
[email protected]
Nicolas Bornozis
Capital Link, Inc.
+1 (212) 661 7566
[email protected]
Navios Maritime Acquisition Corporation
+1 (212) 906 8644
[email protected]
