Cadeler, Eneti to combine through stock-for-stock exchange offer

Cadeler and Eneti, two offshore wind turbine and foundation installation companies, announced that they have entered into a business combination agreement to combine through a stock-for-stock exchange offer to be made to all stockholders of Eneti based on an exchange ratio of 3.409 Cadeler shares for each Eneti share. Following the completion of the exchange offer, Cadeler and Eneti shareholders will own approximately 60% and 40% of the combined company, respectively, on the basis of the share counts for each of Cadeler and Eneti and assuming all outstanding Eneti shares are exchanged for Cadeler shares in the exchange offer. The combined group will be named Cadeler, and be headquartered in Copenhagen, Denmark, with its shares to be listed on the New York Stock Exchange in addition to its current listing on the Oslo Stock Exchange. The business combination agreement has been unanimously approved by the board of each of Cadeler and Eneti. Eneti’s largest shareholder, together with certain of its affiliates collectively holding approximately 29% of all of the issued and outstanding shares of common stock in Eneti, and Eneti’s directors and executive officers, collectively holding approximately 7% of the issued and outstanding shares of common stock in Eneti, have entered into tender and support agreements in favor of the combination. In addition, Cadeler’s two largest shareholders, together in aggregate currently owning approximately 45% of the total current share capital and voting rights of Cadeler, have entered into voting undertakings to vote in favor of the shareholder approval to be obtained by Cadeler. The combination is anticipated to deliver run rate annual synergies of EUR 106M, excluding transaction and change of control cost, comprising corporate and financing synergies of EUR 18M, operational synergies of EUR 37M and EUR 51M through improved utilization of the combined fleets. While the cost synergies are expected to be frontloaded, the targeted utilization synergies are expected to be generated as the newbuilds enter into operation. To facilitate the completion of the Combination, Cadeler will in connection with amendments to its existing financing arrangements increase its total available debt financing facilities including for general corporate and working capital purposes and in addition hereto obtain a credit approved financing commitment to refinance the long-term debt obligation for the combined company’s fleet on the water at attractive terms, subject to completion of the combination and definitive documentation. The transaction is structured as a voluntary conditional registered exchange offer to the stockholders of Eneti, to be initiated by Cadeler with an exchange ratio of 3.409 Cadeler shares for each Eneti share. Based on Cadeler’s share price of NOK 47.68 per share and an exchange rate of NOK/USD 0.10, the proposed combination would value each outstanding Eneti share at approximately $15.44 and the fully diluted share capital of Eneti at approximately $597M. The Cadeler shares are currently expected to be delivered to Eneti shareholders in the form of American Depositary Shares representing Cadeler shares. Upon completion of the combination, Cadeler and Eneti shareholders will own approximately 60% and 40% of the combined company, respectively, on the basis of the 197,600,000 shares outstanding for Cadeler and 38,647,119 shares outstanding for Eneti and assuming all outstanding Eneti shares are exchanged for Cadeler shares in the combination. In addition, if, following completion of the exchange offer, Cadeler has acquired or controls at least 85.01% of the issued and outstanding Eneti shares and voting rights and no other legal impediment to a squeeze-out merger exists, Cadeler intends, indirectly through a wholly-owned subsidiary, to initiate a squeeze-out merger under Marshall Islands law such that, following the merger, Eneti will be a wholly owned subsidiary of Cadeler. The precise consideration minority Eneti shareholders may receive in such merger may be different in form and/or value from the consideration that they would have received had they tendered their Eneti shares in the exchange offer. Cadeler moreover intends to eliminate companies in the Eneti group structure incorporated in any jurisdiction on the EU’s list of non-cooperative jurisdictions for tax purposes, as adopted by the Counsel of EU in due course following completion of the Combination and to the extent feasible from a legal perspective. The Combination is subject to customary closing conditions, including amongst others shareholder approval of an authorization to the board of Cadeler to issue new Cadeler shares in the exchange offer to be adopted by a 2/3 majority of share capital and voting rights represented at an extraordinary shareholders meeting of Cadeler and acceptance of the proposed tender offer by at least 85.01% of all outstanding Eneti shares, the absence of a material adverse change, the receipt of merger clearance as well as any applicable foreign direct investment approvals and approval for the listing of the combined company’s shares on each of the NYSE and OSE. The offer period for the exchange offer will not commence until the offer and listing documentation has been duly reviewed and, if applicable, approved by all relevant regulatory bodies and will not conclude prior to the registration with the U.S. Securities and Exchange Commission of the Cadeler shares to be offered for exchange. The exchange offer is expected to commence in the third or fourth quarter of 2023. The combination is currently expected to close in Q4 2023 subject to regulatory approvals and applicable conditions being met.