Pangaea expands fleet with $295 million vessel merger

NEWPORT, R.I. - Pangaea Logistics Solutions Ltd. (NASDAQ:PANL), a global maritime logistics company, has reached a definitive agreement to merge fifteen handy-size dry bulk vessels into its existing fleet, in a transaction valued at approximately $295 million. The vessels, currently owned by Strategic Shipping Inc. (SSI) and managed by M.T. Maritime Management (USA) LLC (MTM), will join Pangaea's 26-vessel fleet, which ranges from supramax to post-panamax.

The deal will result in Pangaea issuing approximately 19.0 million shares to SSI, equating to a 29% stake in the company upon transaction completion, expected in the fourth quarter of 2024. This share issuance reflects the relative net asset value of SSI's vessels against Pangaea's estimated net asset value of $478 million, or about $10.20 per share. The agreement is subject to customary closing conditions and shareholder approval.

Pangaea's Chairman, Richard du Moulin, described the merger as a "transformational strategic milestone" that would expand the company's owned fleet by nearly 60%, to 41 vessels. He emphasized the potential for incremental growth and improved efficiency and profitability. Pangaea's CEO, Mark Filanowski, added that the addition would enhance service offerings and fleet utilization.

The transaction is expected to be earnings accretive, according to Pangaea's CFO, Gianni DelSignore. He cited the tight supply environment in dry bulk markets as a favorable condition for the merger.

As part of the merger, seven MTM dry bulk chartering and operations team members will join Pangaea, including Dan Schildt, MTM's Senior Vice President, who will become Chief Strategy Officer at Pangaea. Additionally, SSI will have the right to appoint two members to Pangaea's Board of Directors.

The vessels included in the transaction range from 33,000 dwt to 40,000 dwt with an average age of about ten and a half years. The acquisition will also involve the assumption of all current charter commitments associated with the SSI fleet.

This article is based on a press release statement.

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