Acquisition immediately accretive to earnings without synergies;
initial $25 million of synergies will result in high single-digit percentage adjusted EPS accretion
Combination results in a diversified cruise operator
with leading global cruise brands across market segments
Transaction enhances already best-in-class financial metrics
MIAMI – September 2, 2014
– Norwegian
Cruise Line Holdings Ltd. (“Norwegian Cruise Line” or “Norwegian,”
(NASDAQ: NCLH)), a leading global cruise operator, today announced it
has entered into a definitive agreement to acquire Prestige Cruises
International, Inc. (“Prestige”), the market leader
in the upscale cruise segment and parent company of Oceania Cruises and
Regent Seven Seas Cruises, in cash and stock for a total transaction
consideration of $3.025 billion, including the assumption of debt.
“The
acquisition of Prestige represents an extraordinary opportunity for
Norwegian Cruise Line to expand our market presence by adding
two established, award-winning brands in the upscale cruise segment
with loyal followings,” said Kevin Sheehan, Norwegian Cruise Line’s
chief executive officer. "Not only does this acquisition immediately
enhance our financial performance, but it also deepens
the bench of talent that we have been developing over the years. Our
complementary strengths and skillsets will pave the way for new
cross-selling opportunities, cross-brand collaboration, cross-business
support, as well as joint partnerships which, coupled
with meaningful synergies that can be quickly implemented, will provide
solid accretion to earnings per share and drive long-term shareholder
value,” added Sheehan.
“We
are excited to become part of the Norwegian family and start a new
chapter for our company,” said Frank Del Rio,
chairman and CEO of Prestige. “With Oceania and Regent, we have built
iconic brands with distinctive product offerings and strong customer
loyalty. The combination is very compelling and will allow us to further
enhance our renowned guest experience. We are
looking forward to joining the Norwegian team and building upon the
success that our three brands have already achieved.”
Prestige
operates eight ships and approximately 6,500 berths under two
segment-leading brands. Oceania Cruises is
the market leader in the upper-premium cruise segment with five ships
offering destination-oriented cruise vacations to more than 330 ports
around the globe, gourmet culinary experiences, elegant accommodations
and personalized service. Regent Seven Seas
Cruises is the market leader in the luxury cruise segment and operates
three award-winning, all-suite ships, with an additional ship on order
for delivery in summer 2016. Regent offers the industry’s most inclusive
luxury vacation experience visiting over
250 destinations worldwide. Frank Del Rio will remain chief executive officer of Prestige.
“The
combination of three distinct brands, each serving a different market
segment, under one umbrella immediately
creates an industry-leading cruise operator with an unmatched growth
trajectory and a portfolio of products that allows us to appeal to
guests at every stage of their life cycle,” added Sheehan. “We are
fully committed to retaining the brand propositions,
guest experiences and cultures of the Norwegian, Oceania and Regent
brands that have allowed each to realize such success.”
Transaction Rationale
The compelling rationale to acquire Prestige includes:
·
The diversification of cruise market segments by adding upper premium and luxury brands;
·
The further enhancement of industry-leading financial metrics;
·
Opportunities for synergies and the sharing of best practices among brands;
·
An increase in economies of scale providing greater operational leverage;
·
The expansion of growth trajectory and global footprint; and
·
The
opportunity to complement Norwegian’s new build program with the
existing Regent order that provides measured, orderly capacity growth
through
2019.
Transaction Details
The
total transaction consideration of $3.025 billion includes the
assumption of debt. Additionally, a contingent cash consideration
of up to $50 million to Prestige shareholders would be payable upon
achievement of certain 2015 performance metrics.
In
early July, Norwegian's Board of Directors formed a Transaction
Committee and delegated it full authority to negotiate and approve
a transaction. The Committee consisted entirely of disinterested
directors. Genting Hong Kong Limited and certain funds affiliated with
TPG Capital, each of whose consent was required pursuant to Norwegian's
existing shareholders’ agreement have consented
to the transaction. The Transaction Committee, who retained its own
financial and legal advisors, has unanimously approved the transaction.
The transaction is subject to regulatory approvals and other customary
closing conditions and is expected to close
in the fourth quarter of 2014.
Norwegian
will finance the acquisition with existing cash, new and existing debt
facilities and the issuance of approximately 20.3
million shares of its common stock. Pursuant to the requirements of
NASDAQ Rule 5635, holders of a majority of Norwegian's common stock have
consented to the issuance of such shares.
Barclays
is acting as lead financial advisor to Norwegian, Deloitte Consulting,
LLP is acting as diligence advisor and Weil, Gotshal
& Manges LLP is providing legal counsel. UBS Investment Bank is
acting as financial advisor to Prestige and Paul, Weiss, Rifkind,
Wharton & Garrison LLP is providing legal counsel. Perella Weinberg
Partners is acting as financial advisor to the Transaction
Committee of the Norwegian Board of Directors and Cravath, Swaine &
Moore LLP is providing legal counsel. J.P. Morgan Securities LLC and
Deutsche Bank are also serving as financial advisors to Norwegian.
Barclays, J.P. Morgan Securities LLC and Deutsche
Bank have provided committed financing to Norwegian to support the
acquisition.
Conference Call
Norwegian hosted a conference call today, September 2, 2014 at 8:30 a.m. ET to
discuss the transaction. A link to the live webcast
along with a presentation can be found on Norwegian’s Investor
Relations website at
www.investor.ncl.com. A replay
of the conference call will also be available on the website for 30 days after the call.
About Norwegian Cruise Line
Norwegian
Cruise Line is the innovator in cruise travel with a 47-year history of
breaking
the boundaries of traditional cruising, most notably with the
introduction of Freestyle Cruising which revolutionized the industry by
giving guests more freedom and flexibility. Today, Norwegian invites
guests to “Cruise Like a Norwegian” on one of 13 purpose-built
Freestyle Cruising ships, providing guests the opportunity to enjoy a
relaxed, resort style cruise vacation on some of the newest and most
contemporary ships at sea. Recently, the line was named “Europe’s
Leading Cruise Line” for the seventh consecutive year,
as well as “Caribbean’s Leading Cruise Line” and “World’s Leading Large
Ship Cruise Line” by the World Travel Awards.
Norwegian
recently took delivery of its most innovative ship to date, the
4,000-passenger Norwegian
Getaway in the first quarter 2014. The largest ship to homeport
year-round in Miami, Norwegian Getaway boasts 28 dining options,
including seafood restaurant Ocean Blue by famed New York Iron Chef
Geoffrey Zakarian and a branch of Carlo’s Bake Shop by Buddy
Valastro, star of the TLC series “Cake Boss.” The entertainment lineup
includes Broadway shows Legally Blonde and Burn the Floor and a unique
magical theatrical experience, the Illusionarium. Norwegian Getaway’s
sister ship, Norwegian Breakaway, was named
“Best New Ship of 2013” by the editors of Cruise Critic and “Best
Rookie Cruise Ship” by the readers of
Travel Weekly. Known as New York’s ship, Norwegian Breakaway is
the largest vessel to homeport year-round in the city. Norwegian
currently has four vessels on order at Meyer Werft for delivery in fall
2015, spring 2017, spring 2018 and fall 2019.
Norwegian
Cruise Line is the official cruise line of the Miami Dolphins/Sun Life
Stadium, The
New York Knicks, Blue Man Group and Legends in Concert; and the
official cruise line partner of The GRAMMY Awards and is an official
partner of the Rockettes and Radio City Music Hall.
For further information on Norwegian Cruise Line, visit
www.ncl.com, follow us
on Facebook, Twitter, and Instagram @Norwegiancruiseline, Pin us on
Pinterest, watch us on YouTube, or contact us in the U.S. and Canada at
888-NCL-CRUISE (625-2784), or visit
www.ncl.com.
About Prestige
Prestige Cruises International, Inc. is the parent company of
Oceania Cruises and Regent
Seven Seas Cruises. Formed
in 2007 to manage select assets in Apollo Management's cruise
investment portfolio, Prestige is led by Chairman
and CEO Frank Del Rio, the founder of Oceania Cruises. Prestige is the
market leader in the upper-premium and luxury segments of the cruise
industry with nearly 6,500 berths between the Oceania Cruises and Regent
Seven Seas Cruises brands.
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