After being in play for more than a year, Seacor Holdings Inc. announced on Wednesday night that they had signed a definitive agreement to acquire tanker/offshore services company Seabulk International, and the transaction has been unanimously approved by the board of directors at each of the companies. According to the agreement, holders of Seabulk stock will for each share receive approximately 0.2694 shares of Seacor common stock and $4.00 in cash. This represents a premium of approximately 29% to where the shares of the companies were trading at market close on March 16; CKH closed at $65.28 while SBLK closed at $16.73. As of press time, Seabulk’s stock has jumped to $21.01, while Seacor’s has fallen marginally to $64.15, which is a typical market reaction to an acquisition.

Private equity funds Carlyle/Riverstone Global Energy and Power Fund I, LP and CSFB-affiliated DLJ Merchant Banking Partners III, LP own approximately 75% of Seabulk’s common shares. Unlike hedge fund Wexford, which sold stock into the open market for many months, Carlyle and CSFB have been patiently waiting to sell for more than a year.. The transaction itself will be worth a total of approximately $1.003 billion, comprised of $532 million in aggregate equity value and $471 million in net debt obligations, comprised of Title XI bonds on the tankers, a high yield bond and a revolving credit facility from Fortis.

When Riverstone bought Seabulk, the investment thesis was that they paid for the company’s modern double hull U.S. flag product tankers and got the offshore business for free. We suspect Seacor’s rationale is probably very similar. Seacor is hardly a stranger to Seabulk as the former bought many of the latter’s more modern assets when Seabulk when into financial distress in 1999.

The last time we valued Seabulk, we arrived at about $14/share, so advisor Jefferies must be feeling very good about the valuation it achieved. UBS Securities acted as financial advisor to Seacor on the transaction. Credit Suisse First Boston advised on behalf of its DLJ Merchant Banking fund. The merger is expected to close by the end of the second quarter of 2005, subject to approval by shareholders of Seacor and Seabulk.

Seacor Chairman and CEO Charles Fabrikant commented in a press release that: “The merger of Seacor and Seabulk fits the goal of diversification we have outlined for several years in annual letters to shareholders. Both Seacor and Seabulk have achieved leadership positions in different asset-based transportation service businesses. The combination will create a balanced portfolio of assets, focused on five different business niches. Seabulk’s position in the U.S. tanker business, with its business template of multi-year contracts, and the harbor tug business are a good balance to the offshore vessel sector, the helicopter business, and the inland river barge business.”

Seabulk’s Chairman and CEO Gerhard Kurz expressed similar sentiments, and it the new company will certainly go to a privileged position as one of only two companies providing complete global service in their specific industry. It will be interesting to see how this affects the valuation, though we do suspect there may be further shake-up to come after the transaction is finalized. OSG had in the past expressed interest in Seabulk’s tanker fleet, and with tanker values at a substantial premium to historical prices, it would not be too surprising to see Seacor opt to cash out on the value of Seabulk’s fleet rather than getting involved in a whole new industry that would not add much value to its other operations.