Navios Maritime Acquisition surges 41% on merger agreement with Navios Maritime Partners

seekingalpha2021-08-27
  • Navios Maritime Partners(NYSE:NMM) and Navios Maritime Acquisition(NYSE:NNA)announced a definitive transaction agreement providing for a combination of both the companies in a transaction in which shareholders of the latter will receive 0.1275 of a common unit of the former for each outstanding common share of Navios Acquisition.
  • All of Navios Acquisition’s outstanding 8.125% First Priority Ship Mortgage Notes, due on Nov. 15, 2021, will be redeemed utilizing the proceeds of a cash contribution from Navios Partners and newly arranged secured term loan financings.
  • "The combined entity will be the largest U.S. publicly-listed shipping company in terms of vessel count, with 15 vessel types diversified across three segments, servicing 10+ end markets. About one-third of our fleet will be in each of the dry bulk, containership and tanker segment," chairwoman & CEO Angeliki Frangou commented.
  • The current value of the combined company's vessels is estimated at $4.2B and it will have an enterprise value of ~$2.25B.
  • With a $1.6B pipeline of contracted revenue coupled with ~47,634 available days in 2022, the combined fleet is well-positioned to take advantage of the healthy dry cargo markets as well as any future upturn in the tanker market.
  • In connection with the transaction, Navios Partners provided Navios Acquisition with a $45M interim working capital facility.
  • The merger is expected to close in Q4 wherein post the NNA Equity Issuance, Navios Partners owns ~62.4% of the outstanding common shares of Navios Acquisition.
  • In mid-August, SA Contributor Nick First recently wrote, "Navios Partners remains absurdly cheap at just 1.6x 2022 earnings and a third of current net asset value despite the higher share count."
  • NNA shares rallied 41.9% higher after hours while NMM shares traded 4.6% down after hours.
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