Hornbeck Offshore Announces Definitive Agreement to Sell its Downstream
Segment for $230 million
COVINGTON, La., July 22, 2013
COVINGTON, La., July 22, 2013 /PRNewswire/ --Hornbeck Offshore Services, Inc.
(NYSE: HOS) ("Hornbeck" or "the "Company") announced today that it has entered
into a definitive agreement to sell substantially all of the assets and
business of its Downstream segment's tug and tank barge ("TTB") fleet to
Genesis Marine, LLC ("Genesis"), an affiliate of Genesis Energy L.P.
(NYSE:GEL), for cash consideration of $230 million. Simultaneously with the
execution of the definitive agreement, Genesis posted a $23 million deposit.
The Company expects to use the after-tax proceeds from this transaction for
general corporate purposes, which may include retirement of debt or funding
for the acquisition, construction or retrofit of vessels. The Downstream
vessels to be sold to Genesis are comprised of Hornbeck's active fleet of nine
ocean-going tugs and nine double-hulled tank barges.
The transaction is subject to customary closing conditions and regulatory
clearances, including the expiration or termination of the waiting period
under the Hart-Scott-Rodino Act, and is anticipated to close by the end of the
third quarter of 2013. Hornbeck and Genesis also plan to enter into
transition service agreements at closing in order to ensure a smooth
transition of operations and services for both employees and customers.
Additional details regarding the transaction will be provided in the Company's
previously announced quarterly earnings announcement on July 31, 2013 and
related conference call on August 1, 2013.
Todd M. Hornbeck, the Company's Chairman, President and Chief Executive
Officer stated: "Given the substantial pending growth in our Upstream fleet
over the next few years as a result of previously announced newbuild and
retrofit programs and any incremental organic or acquisitive growth that may
arise, we believe that the timing is right to divest of our non-core
Downstream segment in order to strategically focus our energies on our
Upstream core business. Due to the recent recovery in Downstream market
conditions since the financial collapse of 2008, we were able to monetize our
active TTB fleet at what we believe to be a very fair price – above our
original investment in these assets – and believe that the redeployment of
that capital in our Upstream business will unlock value for our shareholders.
Our ability to enter into this agreement is a testament to the excellent
operational track record and quality of our valued Downstream workforce that
we and Genesis are fortunate to have in our future."
J.P. Morgan Securities LLC acted as exclusive financial advisor to Hornbeck
Offshore with respect to this transaction.
Hornbeck Offshore is a leading provider of technologically advanced, new
generation offshore supply vessels primarily in the U.S. Gulf of Mexico and
Latin America, and is a leading short-haul transporter of petroleum products
through its coastwise fleet of ocean-going tugs and tank barges, primarily in
the northeastern U.S. and the U.S. Gulf of Mexico. The Company currently owns
a fleet of 76 vessels primarily serving the energy industry and has 23
additional high-spec Upstream vessels under construction for delivery on
various dates through 2016.
This news release contains forward-looking statements, including, in
particular, statements about the Company's plans and intentions with regard to
the closing of the sale of the Downstream fleet, the timing thereof, the
anticipated proceeds therefrom, and the execution and performance of
transition service agreements. These have been based on the Company's current
assumptions, expectations and projections about future events. Although the
Company believes that the expectations reflected in these forward-looking
statements are reasonable, the Company can give no assurance that the
expectations will prove to be correct.
Contacts: Todd Hornbeck, CEO
Jim Harp, CFO
Hornbeck Offshore Services
Ken Dennard, Managing Partner
Dennard-Lascar / 713-529-6600
SOURCE Hornbeck Offshore Services, Inc.
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