Brazil maritime services firms unite in R$2.6bn implied deal

After a long-standing commercial relationship and years of talks, OceanPact and CBO have reached an agreement to combine their operations. The transaction brings together Brazil’s largest maritime services provider to the oil and gas industry and the country’s second-largest player, positioning the merged company close to U.S.-based Bram Offshore with a combined fleet of 73 vessels.

Under the deal structure, CBO’s shareholders—the company is privately held—will hold the larger stake in the combined group, although OceanPact will be the surviving entity and will maintain its listing on B3. CBO’s main shareholders are Pátria and Vinci, each with 37.76%, BNDESPar with nearly 19%, and Italy’s Finarge with 5.6%. Together, they will own 57.86% of the merged company.

At OceanPact, founder and CEO Flavio Andrade is currently the largest shareholder, with 30.75%. Dynamo, HIX, and Organon also hold relevant stakes, and the free float stands at 33.71%. OceanPact currently has 200 million shares outstanding and, to complete the merger, will issue 275 million new shares at a ratio of 1.98 common shares for each CBO share. With OceanPact valued at R$1.9 billion on the stock exchange, the implied valuation for CBO is R$2.6 billion.

“At our year-end party, the only competitor ever invited was CBO,” Andrade said, underscoring the closeness between the companies. “OceanPact is an experienced young company, with 18 years of operations. We started as a consultancy with no vessels, deploying our oil-spill response equipment on third-party fleets. When we saw the opportunity to charter vessels, we began working with CBO, which has 48 years of operations. Over time, we acquired assets from them as they modernized their fleet.”

Market speculation about a potential M&A transaction has circulated since OceanPact’s IPO in 2021. Talks gained traction at a conference in London in February 2024. Andrade will remain CEO of the combined OceanPact, as will current CFO Eduardo de Toledo. CBO’s CEO Marcos Tinti will become vice president of navigation.

The merger comes at a time when both companies are posting strong results, unlike recent deals driven by capital structure pressures. OceanPact and CBO have expanded margins, secured higher daily charter rates in contract renewals, and signed new agreements, reaching a combined backlog of R$13.6 billion.

“Daily rates have returned to healthy levels for the existing fleet. But given demand growth, there will be a shortage of vessels,” Tinti said, citing Petrobras’s business plan as a key driver. “Both companies see this. We want a larger fleet, but without building new vessels right now because prices are high,” Andrade added.

While the transaction is expected to generate synergies, executives emphasize complementarity. CBO operates a broader range of vessel types, while OceanPact offers a wider array of services. “A huge value creation potential will come from operational integration, combining the best of each. CBO has lower breakdown rates, and we will learn from and adopt its practices, such as in-house workshops. OceanPact, on the other hand, has much lower fleet idle rates, so we can help improve vessel utilization,” Andrade said.

Based on 12-month figures through September, the companies together posted revenue of R$4.2 billion, EBITDA of R$1.8 billion, and net income of R$338 million. Leverage has been declining at both firms and, on a consolidated basis, will stand at 2.6 times. Much of the debt stems from CBO, which had higher leverage but at lower cost and longer maturities.

“Most of our debt consists of debentures issued in the market, while 70% of CBO’s debt is with the Merchant Marine Fund. On a consolidated basis, leverage increases slightly, but with cheaper and longer-duration debt,” the CFO said. Both companies reversed losses from the previous year, and the combined profit base increases the potential for dividend distributions.

The agreement with CBO does not include a litigation claim by an OceanPact subsidiary against Petrobras, which, according to Bradesco BBI analysts, could result in a R$400 million payment by the state-owned oil giant. If awarded, the amount would be distributed to OceanPact’s original shareholders and to a legal claims fund. The contingent asset stems from a lawsuit filed by UP Offshore against Petrobras, inherited by OceanPact when it acquired UP.

Andrade, Pátria, Vinci, and BNDESPar will enter into a five-year shareholders’ agreement. The businessman and the private equity funds will have unanimity clauses on certain matters and a co-ownership arrangement. This shareholder group has agreed to a nine-month lock-up period, after which the private equity vehicles will have an exit window.

Source: Valor International

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