Note 3 - Acquisitions of Swire Pacific Offshore Holdings LTD

3 Months Ended

Mar. 31, 2023

Notes to Financial Statements

Business Combination Disclosure [Text Block]

(3) ACQUISITION OF SWIRE PACIFIC OFFSHORE HOLDINGS LTD

On April 22, 2022 (Closing Date), we acquired Swire Pacific Offshore Holdings Ltd., a limited company organized under the laws of Bermuda (SPO), which at closing owned 50 offshore support vessels operating primarily in West Africa, Southeast Asia and the Middle East. On the Closing Date, we paid $42.0 million in cash and issued 8,100,000 warrants, each exercisable at $0.001 per share for one share of our common stock (SPO acquisition warrants). In addition, we paid $19.6 million at closing and received an $8.8 million post-closing working capital refund related to pre-closing working capital adjustments, for a total consideration of $215.5 million.

Assets acquired and liabilities assumed in the business combination were recorded at their estimated fair values as of the Closing Date under the acquisition method of accounting.

As of March 31, 2023, the following recorded fair value amounts for the assets acquired and liabilities assumed were final, with no material measurement period adjustments made during the quarter:

(In Thousands)
Assets
Cash	$	33,152
Trade and other receivables		64,621
Marine operating supplies		5,122
Assets held for sale		2,500
Prepaid expenses and other current assets		4,174
Net properties and equipment		174,415
Indemnification assets (A)		32,279
Other assets		1,153
Total assets		317,416
Liabilities
Accounts payable		1,594
Accrued expenses		54,924
Other current liabilities		28,511
Other liabilities		16,886
Total liabilities		101,915
Net assets acquired		215,501

(A) Consists primarily of tax liabilities existing at the Closing Date that are recorded in other current liabilities and other liabilities.

Business combination related costs were expensed as incurred in general and administrative expense and consist of various advisory, legal, accounting, valuation and other professional fees totaling $0.7 million and $2.2 million for the three months ended March 31, 2023 and 2022, respectively.

The unaudited supplemental pro forma results present consolidated information as if the business combination were completed on January 1, 2022. The pro forma results include, among others, (i) a reduction in depreciation expense for adjustments to property and equipment and (ii) the reversal of any income or expense related to assets retained by the seller and SPO’s former parent, Banyan Overseas Limited, a limited company organized under the laws of Bermuda (Banyan). The pro forma results do not include any potential synergies or non-recurring charges that may result directly from the business combination.

(In Thousands)
	Period from
	January 1, 2022
	to March 31, 2022
Revenues	$	159,677
Net loss		(12,736	)