Avista Capital Partners has invested in a joint venture with SEACOR Tankers, a subsidiary of SEACOR Holdings, which operates a fleet of seven U.S.-flag vessels in U.S. coast trading crude oil, petroleum and specialty chemical products. Under the terms of the deal, Avista will fund a portion of the equity required for design and construction of three, 50,000-ton product carriers, each with 330,000 barrel cargo capacity.
Avista Capital Partners (“Avista”), a leading private equity firm, today announced an investment in a newly formed joint venture with SEACOR Tankers Inc., a subsidiary of SEACOR Holdings Inc. (NYSE: CKH) that operates a fleet of seven U.S.-flag Jones Act vessels (five owned and two chartered-in) in the U.S. coastwise trade transporting crude oil, petroleum and specialty chemical products.
Under the terms of the joint venture, ACP III Tankers LLC, a wholly owned entity of Avista, will fund a portion of the equity required for the design and construction of three 50,000 deadweight ton product carriers, each with 330,000 barrel cargo capacity, which SEACOR has contracted to build at General Dynamic’s National Steel and Shipbuilding Company (“NASSCO”) shipyard in San Diego, California, with vessel delivery dates of mid 2016, late 2016 and early 2017.
SEACOR Tankers and its affiliates are a full service Jones Act shipping platform with an existing fleet of seven product tankers, all of which are on time charter or long-term bareboat charter. The Merchant Marine Act of 1920, commonly known as the Jones Act, requires that the transportation of cargo between U.S. ports be carried by U.S.-flag vessels, constructed in U.S. shipyards and crewed and operated by U.S. citizens.
“We are very excited about our new partnership with SEACOR Tankers,” said Steve Webster, Co-Managing Partner and Co-CEO of Avista Capital Partners. “The U.S. is projected to continue to experience significant oil and liquids production growth. This growth is creating incremental demand for Jones Act tonnage, as current pipeline and rail infrastructure are not sufficient to handle the expected ramp up. With our capital investment and SEACOR’s experienced team, with whom we have worked closely in the past, our joint venture will be very well positioned to meet this increasing demand and capitalize on future growth opportunities as a result of the strong and improving fundamentals in the Jones Act industry.”
Milbank, Tweed, Hadley & McCloy, LLP and Blank Rome LLP served as legal advisors to SEACOR and Vinson & Elkins LLP and Winston & Strawn LLP served as legal advisors to Avista.
About Avista Capital Partners
Avista Capital Partners is a leading private equity firm with approximately $6 billion under management. Founded in 2005, Avista makes controlling or influential minority investments in growth-oriented energy, healthcare, communications & media, industrials, and consumer businesses. Through its team of seasoned investment professionals and industry experts, Avista seeks to partner with exceptional management teams to invest in and add value to well-positioned businesses.