Pangaea and MTM to combine fleets of dry bulk vessels in all-stock transaction

The handy vessels are currently owned by Strategic Shipping Inc. ("SSI"), a privately held company managed by MTM located in Southport, Connecticut. The fifteen handy-size vessels are valued at approximately US$295 million, inclusive of vessel related financing agreements of approximately $102 million, resulting in a total net asset value of US$193 million.

As consideration, Pangaea will issue approximately 19.0 million shares of its common stock to SSI equal to approximately 29% of the Company's outstanding common stock upon completion of the proposed transaction, which represents the relative net asset value of SSI's vessels compared to the estimated net asset value of Pangaea of approximately US$478 million, or about US$10.20 per share. The transaction is expected to close in the fourth quarter 2024, subject to customary closing conditions and shareholder approval.

Management Commentary

"This transaction represents a transformational strategic milestone for our business, one that expands our owned fleet by nearly 60%, to 41 vessels, and provides us opportunities to drive incremental growth and improve our efficiency and profitability," stated Richard du Moulin, Chairman of the Board of Pangaea Logistics Solutions. "The addition of the SSI vessels to our existing fleet is consistent with our strategic focus on upgrading our owned vessel fleet to meet the evolving cargo needs of our customers."

"We have always operated in the handy segment, but the addition of these vessels will allow us to offer expanded services and will help us to better leverage our integrated shipping and port logistics models, improving overall fleet utilization, and maximizing our profitability," said Mark Filanowski, Pangaea's Chief Executive Officer. "Importantly, MTM's highly experienced dry bulk chartering and operations teams will be joining Pangaea, along with certain members of the MTM executive team. We are excited to welcome the experienced and talented group from MTM, who will help ensure a seamless integration of our business plans and position us for continued future growth."

"We expect the transaction will be accretive to our earnings going forward, as dry bulk markets respond to a tight supply environment" added Gianni DelSignore, Chief Financial Officer of Pangaea Logistics Solutions. "This represents a significant advancement in our growth strategy, adding vessels with approximately 34.6% leverage, enabling us to maintain our financial flexibility and providing us ample capacity to pursue our strategic growth initiatives."

Filanowski added: "We believe the transaction is extremely attractive from both a financial and strategic perspective and will allow us to further take advantage of the favorable macro backdrop in the dry bulk market. Together with the MTM team, we are excited for this next chapter of growth and believe that our partnership will serve to continue the development of our leading dry bulk logistics and transportation service offering, while delivering sustainable above-market returns for our shareholders."

Doug MacShane, Executive Chairman of M.T. Maritime Group, which manages SSI, said "We believe that Pangaea's unique business model and long track-record of excellence in dry bulk shipping and logistics make them an ideal partner as we seek to take advantage of the evolving shipping landscape. By combining our fleet and operations with Pangaea, we will provide the scale and capabilities to better serve the needs of both Pangaea and MTM's existing customers, while creating a strong platform to pursue commercial and operating synergies. We are excited for the long-term growth opportunities that this partnership presents."

For more information, visit: https://www.pangaeals.com/investors/press-releases-presentations/

Read the article online at: https://www.drybulkmagazine.com/dry-bulk/24092024/pangaea-and-mtm-to-combine-fleets-of-dry-bulk-vessels-in-all-stock-transaction/