Tidewater Inc. Acquires WSUT to Strengthen OSV Position and Expand Brazilian Fleet
In the highly competitive offshore vessel market, where scale and strategic positioning are crucial, Tidewater Inc. is making a significant move. The company, a leading provider of offshore support vessels (OSVs) with over 65 years of experience, has announced a definitive agreement to acquire Wilson Sons Ultratug Participações S.A. and its affiliate Atlantic Offshore Services S.A. (collectively, “WSUT”) for an enterprise value of approximately $500 million, including the assumption of WSUT’s existing debt.
This acquisition will significantly enhance Tidewater’s fleet and operational capabilities, particularly in Brazil, a key market for offshore energy. Quintin Kneen, Tidewater’s President and Chief Executive Officer, commented, “The agreement to acquire WSUT marks yet another important milestone in the continued evolution of Tidewater. The Brazilian offshore vessel market is one of the largest and most compelling in the world, and the addition of WSUT to the Tidewater fleet will enhance our presence in the country.”
Key Insights at a Glance
- Fleet Expansion: Pro forma for the Transaction, Tidewater will own a fleet of 213 OSVs, bringing its total global fleet size to 231 vessels.
- Brazilian Presence: Tidewater’s fleet in Brazil will expand from 6 to 28 vessels, providing meaningful scale and operational capability.
- REB Tonnage Rights: WSUT’s Brazilian-built fleet will enable Tidewater to import international-flagged vessels into Brazil under the Brazilian Special Registry (REB).
- Financial Accretion: The Transaction is expected to deliver meaningful accretion to both 2026E and 2027E earnings and free cash flow per share.
The Scale of the Offshore Vessel Market in Brazil
Just as a well-orchestrated symphony requires a diverse ensemble, the offshore vessel market in Brazil demands a robust and versatile fleet. Tidewater’s acquisition of WSUT addresses a critical industry challenge: the need for scale and specialized vessels to support the growing Brazilian offshore energy market. With 19 of WSUT’s 22 PSVs being Brazilian-built, Tidewater will not only enhance its operational capabilities but also gain a competitive edge in local tendering processes. The long-term fundamentals for the Brazilian market are highly favorable, making this acquisition a strategic move to capitalize on future opportunities.
Why the Window for Action Is Closing Fast
Like a ship navigating through a narrow channel, Tidewater must act swiftly to secure its position in the Brazilian market. The acquisition of WSUT provides immediate financial accretion and significant backlog coverage, with WSUT’s fleet delivering approximately $441 million of existing backlog. Many of these contracts are currently on day rates materially lower than current market rates, offering potential for significant earnings and free cash flow uplift as contracts roll over. The Transaction is expected to close late in the second quarter of 2026, subject to regulatory approvals and other customary closing conditions.
Tidewater Inc. Mobilizes for Strategic Growth
Tidewater Inc. is taking decisive steps to solidify its position as a leading OSV operator. The acquisition of WSUT will expand Tidewater’s fleet to 231 vessels, including 28 in Brazil, and establish the company as one of the main providers of Brazilian-built PSVs. Kneen noted, “Assuming the transaction closes at the end of the second quarter, we expect the WSUT business to generate approximately $220 million of revenue and a gross margin of approximately 58% over the first twelve months.” The company’s strong balance sheet, with a net leverage ratio below 1.0x, provides the flexibility to pursue additional capital deployment opportunities.
Future Outlook
The acquisition of WSUT is like adding a powerful engine to a well-tuned machine. Tidewater’s expanded fleet and enhanced presence in Brazil position the company to capitalize on the growing demand for offshore support vessels. The built-in, low-cost financing and significant backlog coverage further solidify Tidewater’s financial strength. Pro forma for the Transaction, Tidewater will have a net leverage ratio below 1.0x, providing continued flexibility to pursue additional opportunities.
Conclusion
The acquisition of WSUT by Tidewater Inc. underscores the company’s commitment to strategic growth and operational excellence. By expanding its fleet and enhancing its presence in Brazil, Tidewater is well-positioned to meet the growing demands of the offshore energy market. Join the conversation in the comments below.
About Tidewater
Tidewater owns and operates one of the largest fleets of offshore support vessels in the industry, with more than 65 years of experience supporting offshore energy exploration, production, generation and offshore wind activities worldwide.
Source link: https://www.businesswire.com/
