Taylor Maritime Investments has sold its commercial and technical managers to its subsidiaries Grindrod Shipping Holdings and Grindrod Shipping Pte. Ltd. The subsidiaries have agreed to acquire each of Taylor Maritime Management Limited (TMML) from Taylor Maritime Group Limited and Tamar Ship Management Limited (Tamar) from Taylor Maritime Group Limited and Temeraire Holding (MI) Limited. TMML and Tamar are respectively the commercial and technical managers of the majority of the vessels in the portfolio (excluding those of the Grindrod group).
The acquisition of the commercial and technical managers by Grindrod brings the management of both companies’ fleets together under one entity and creates economies of scale. The fleet management strategies will be aligned and fleet resources pooled with a view to creating potential synergies across three key areas: technical management, commercial management and vessel accounting.
Grindrod Shipping Pte. Ltd. is paying $11.75m for TMML and Tamar – S$2.0m in cash and $1.95m in shares upfront, plus $3.9m of shares on the first and second anniversary of the deal, subject to certain earn-out related conditions. The aggregate maximum value of the consideration for the transaction will not exceed $13.5m. Grindrod Shipping Holdings intends to finance its transaction with a combination of cash on hand and allotment of new Grindrod ordinary shares over the two years from completion. The number of consideration shares issuable is calculated based on the volume weighted average price on both NASDAQ and the Johannesburg Stock Exchange, plus a 7.5% premium over a three month period prior. At the discretion of the buyer, in lieu of new share issuances, there is an option for any portion of the first year and second year consideration amounts to be paid in cash, at an increase of 1.10 times and 1.20 times, respectively.
TMI : Taylor Maritime extracts further economies of scale from Grindrod investment