Helix to Merge into Hornbeck

Hornbeck Offshore Services Inc and Helix Energy Solutions Group Inc have signed an agreement to combine via an all-stock transaction.

Hornbeck will survive as the enlarged entity and will trade on the New York Stock Exchange, said a joint statement Thursday.

Shareholders of Covington, Louisiana-based Hornbeck, which operates a fleet of service vessels catered to energy companies and the military, will own about 55 percent of the resulting company. Shareholders of Houston, Texas-headquartered Helix, involved in well intervention, robotics and decommissioning, will own approximately 45 percent.

Hornbeck stockholders are to receive 10.27167 Helix shares for each Hornbeck share.

"The strategic combination will create a recognized leader in offshore operations through a diversified and expanded high-specification fleet of specialty vessels, supported by subsea robotics, well intervention and technical service capabilities, including trenching subsea pipelines and cables", the companies said.

"The combined company will provide innovative and integrated subsea and marine transportation solutions to customers across deepwater energy, defense and renewables".

The parties expect to complete the transaction in the second half of this year, subject to approval by Helix shareholders, the receipt of regulatory clearances and the satisfaction of other customary conditions.

The companies have agreed to appoint Hornbeck chair, president and chief executive Todd M. Hornbeck as president and CEO of the combined company. The combined company's board would have four directors from Hornbeck, including Mr Hornbeck, and three from Helix. William L. Transier, a Helix director, is to be named board chair.

"Helix's global presence in the West Africa, Asia Pacific and North Sea regions, as well as the United States and Brazil, and Hornbeck's concentration in the Americas, including Brazil and Mexico, enhance a global footprint spanning the key offshore basins worldwide", the statement said.

"The combined company's footprint will include cabotage-protected markets and will have direct access to leading offshore customers, enabling the delivery of premier deepwater services through technologically advanced assets".

The enlarged Hornbeck would reduce "cyclicality and through-cycle earnings volatility, while enabling flexible global asset deployment where demand is strongest", the companies said.

"The transaction is expected to generate $75 million or more in annual revenue and cost synergies within three years following the transaction close", they said. "The synergies are expected to result from combined and integrated service offerings, as well as expanding services offered to existing customers, driving revenue pull-through.

"The scale of the combined company’s fleet enables asset optimization, reducing reliance on third-party vessel charters and delivering efficiencies across maintenance, procurement and operations".

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