Banking Recap

Pangaea Logistics Solutions Ltd. Announces Acquisition for $295.0M

Pangaea Logistics Solutions Ltd. (Nasdaq: PANL), a global maritime logistics and dry bulk shipping company, and M.T. Maritime Management (USA) LLC (MTM) announced a definitive agreement for Pangaea to acquire fifteen handy-size dry bulk vessels, currently owned by Strategic Shipping Inc. (SSI), a privately held company managed by MTM, and merge them into Pangaea's existing twenty-six vessel fleet. The vessels were valued at approximately $295 million, inclusive of approximately $102 million of vessel-related financing agreements, for a total net asset value of $193 million. The deal is in the deep sea foreign transportation of freight sector (SIC 4412).

Sep 24, 2024·SEC EDGAR (8-K)·pending regulatory·all-stock fleet acquisition

Deal value

This entry is sourced from an 8-K exhibit (Exhibit 99.1) filed by Pangaea Logistics Solutions Ltd. with the SEC on September 24, 2024, announcing the signing of the agreement. The transaction was expected to close in the fourth quarter of 2024, subject to customary closing conditions and shareholder approval. As part of the deal, seven employees from MTM's dry bulk chartering and operations teams were to join Pangaea, including Dan Schildt as Chief Strategy Officer, and SSI was granted the right to designate two new members to Pangaea's board of directors, Christina Tan (CEO of MTM) and Gary Vogel (former CEO of Eagle Bulk Shipping).

On financial advisory, DNB Markets, Inc. served as Pangaea's financial advisor for the transaction. No separate financial advisor to SSI or MTM is named in this press release.

On legal advisory, Seward & Kissel LLP acted as legal advisor for the transaction (the release does not specify whether this representation was exclusively for Pangaea or for the transaction as a whole).

The deal structure disclosed is an all-stock transaction: Pangaea agreed to issue approximately 19.0 million new common shares to SSI's owners, equal to approximately 29% of Pangaea's outstanding common stock upon completion, representing the relative net asset value of SSI's vessels compared to Pangaea's own estimated net asset value of approximately $478 million (about $10.20 per share). Cash consideration was to be limited to net working capital contributions, if any, at closing, and Pangaea agreed to assume responsibility for all current charter commitments associated with the SSI fleet.

What is not disclosed: the press release does not name a financial advisor representing SSI or MTM in the transaction, does not specify the exact number of shares to be issued (noting it would be determined at closing based on relative fair net asset values), and does not disclose a termination fee.