Entry to the protected Canadian market will be a key part of the proposed merger between Herbjorn Hansson's Nordic American Offshore (NAO) and domestic operator Horizon Maritime Services (HMS).
Turner Holm, managing director of equity and credit research at Clarksons Platou Securities, said the combination would be a "win-win" for both parties.
It appears to provide a new source of liquidity for NAO, which had $12m in cash as of the end of the second quarter and could have run short without this transaction, he added.
"NAO gets a larger fleet and market cap, a share in cost synergies, access to a new market and a source of liquidity," said Holm, whose firm advised on the deal.
"Meanwhile, Horizon gains a high-spec fleet and a public listing at a time when macro conditions are rapidly improving, yet ship values remain subdued."
The two companies will run 17 OSVs.
Holm said: "An important element of the deal for NAO is access to Horizon’s home market of Canada, where competition is tempered by Canadian flag requirements.
The top four players in Canada have a combined market share of 90% with the largest, Atlantic Towing, controlling 41% of the 29 PSVs, AHTS and MPSVs in the country.
Rates higher in Canada
"As a result of local regulations and a comparatively restrained competitive landscape, rates in Canada are known to be well above the North Sea market, where NAO operates nearly exclusively today," Holm added.
"A look at NAO’s fleet suggests two of its 10 existing vessels that have ice-class could be candidates for importation to Canada at some stage."
Horizon's two multipurpose platform supply vessels (MPSVs) also appear to be a key element of the value in the company. Clarksons Platou estimates these ships could be worth "well north of $100m" in total.
It also has two chartered-in PSVs from Tidewater and three workboats.
In addition, Horizon also owns a vessel crewing and management business as well as a supply base in Nova Scotia.
