MSC offers nearly $700mn to buy Gram Car Carriers

MSC Group, through its subsidiary SAS Shipping Agencies Services, has agreed to acquire Norway-based car carrier Gram Car Carriers (GCC) for nearly $700 million.

Gram Car Carriers is the third largest tonnage provider in the world with a modern car carrier fleet. The company is the commercial manager of 22 car carriers of which 18 are owned and four are managed (dual-fuel LNG car carriers under construction) on behalf of third-party owners with a capacity of between 2,000 and 7,000 units.

For the first quarter of 2024, GCC reported revenue of $54.9 million and EBITDA of $40.8 million, down slightly from $41.6 million in the fourth quarter of 2023. Total revenue backlog was $794 million at the end Q12024, says a regulatory filing.

For 2023, GCC reported a revenue of $200.9 million, an increase of 66 percent YoY, and net profit of $94 million compared to $24 million in 2022, an increase of 300 percent.

The board of directors of Gram Car Carriers has recommended all shareholders to accept the offer for a cash consideration of NOK 263.69 ($24), representing an aggregate equity purchase price of approximately NOK 7.643 billion ($695 million).

"The company had, on April 23, 2024 resolved to distribute a dividend for the first quarter of 2024 of NOK 9 per share. The offer price plus the Q1 dividend will result in a total cash proceeds to shareholders receiving such dividend and selling shares in the offer of NOK 272.69 per share," says a notification to the Euronext stock exchange.

The total share proceeds represent:

*A premium of 28.3 percent to the closing trading price for the shares on April 23, 2024 of NOK 212.5; and

*A premium of 17.5 percent compared to the all-time high closing trading price for the shares of NOK 232, adjusted for dividend up to and including April 23, 2024.

Ivar Myklebust, Chair of the Board, Gram Car Carriers says: "Gram Car Carriers represents a proud history of more than 40 years of engagement in the global car shipping industry. Since the listing on Euronext in Oslo in 2022, the company has successfully executed the long-term strategy by delivering safe and efficient operations for customers world-wide, rechartering the fleet in a historically strong market and completed accretive vessel transactions. This is reflected in significant value creation through increased cash generation, material share price appreciation and attractive quarterly dividend distributions. Today's voluntary offer by one of the world's leading maritime groups is a validation of the unique position GCC has built as a leading car shipping tonnage provider and the long-term commitment put in by the entire team. The board is satisfied that the offer represents a fair valuation of GCC, as is also reflected in the recommendation to shareholders to accept the offer."

The acceptance period for the offer will commence at the latest on May 31, 2024, following publication of the offer document, and will remain open for no less than 20 business days. The offer will be completed during the third quarter or at the latest in the fourth quarter of 2024, the update added.