Global Ship Lease (GSL) and Poseidon Containers Holdings are to merge their respective containership operations in a transaction valued at over $780m.
The deal marks a third attempt by Poseidon founder George Youroukos to take the company public.
The combined company will have a fleet of 38 vessels focused on mid-sized and smaller vessels with an asset base of more than $1.2bn.
Poseidon chief executive George Youroukos will be executive chairman of the combined entity, with GSL chief executive Ian Webber retaining that role.
“By combining the strengths of these two highly complementary organizations, Global Ship Lease will be in a position to achieve significant additional growth and to benefit substantially in a recovering market,” said Youroukos.
“The clear disconnect between supportive long-term supply/demand fundamentals and cyclically low asset prices represents a highly compelling opportunity to invest in mid-sized and smaller containerships.”
GSL chief Ian Webber said the combination would enable the company to “double the size of our fleet, diversify and enlarge our portfolio of customers”.
He added that it would also improve the fleet age profile, reduce leverage, and significantly strengthen its ability to “capitalize on compelling growth opportunities”.
“Importantly, we will also benefit from the extensive operational and commercial capabilities that George Youroukos has separately established.”
Poseidon Containers looked to complete an initial public offering on the New York Stock Exchange in 2015 but the effort was iced sue to difficult market conditions.
Giouroukos the deal-marker
Giouroukos has had a 25-year career in shipping as the founder of Technomar.
He is no stranger to deal-making having been involved in over 150 secondhand and newbuilding transactions by the time Poseidon launched its IPO in 2015.
He has since grown Posidonia with notable transactions including the purchase of a number of vessels from Diana Containerships.
A second attempt to establish a public presence emerged last year when Posiedon explored a merger with Aristides Pittas-led Euroseas.
Pittas told TradeWinds at Posidonia this summer the talks had stalled but he remained open to other consolidation activity in the box and dry bulk markets.
Poseidon taking control
The transaction values GSL at $100m. Upon closing of the transaction, Poseidon will contribute an additional $227m in equity value.
Following the deal members of Poseidon Containers will own about 69.5% of the economic interest of the enlarged GSL.
Upon the closing of the transaction, GSL’s board will be expanded to eight directors, two of which will be nominated by Poseidon, and three, including two independent directors, will be nominated by GSL.
CMA CGM, previously controlled 44% of GSL, will have a right to designate two of the GSL nominees to the Board of Directors for so long as it holds at least 10% of the voting power and one nominee if that levels falls to between 5% and 10%.
According to its 2017 annual report Michael S. Gross of Marathon Founders was the second largest investor in GSL with just under 20% of the company.
Gross, a former Apollo Investment and Solar Capital executive, had been chairman of GSL.
