Towage giants join forces

Royal Boskalis Westminster N.V. (Boskalis) and Saam S.A. (Saam) have announced they have successfully created a new joint harbour towage operation to operate within the above mentioned areas. The partnership, between Smit, a wholly owned subsidiary of Boskalis and Saam, a wholly owned subsidiary of Sociedad Matriz Saam S.A, (SM Saam) had previously been announced in September 2013 and all conditions to form the joint venture have now been fulfilled.

The combined companies will operate under the name Saam Smit Towage (SST), the partnership consisting of two underlying joint ventures. Both companies are major players in the region and have a formidable array of assets at their disposal, currently operating a fleet of 100 tugs in more than 30 port terminals in Brazil, Mexico, Canada and Panama. The total combined EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) of SST is stated as US$100m. The merger is expected to generate synergies estimated at approximately US$10m per year, a figure expected to be reached within the next two years. The merging of the two companies’ assets and operations will produce the expected synergies including increased fleet efficiency and cost savings, and as operations are further integrated, sharing of best practices and market synergies are expected to generate additional value.

The geographic scope of the first joint venture covers the Brazilian towage market, where Smit and Saam already operate. Boskalis and Saam each hold an equal 50% share in the new joint venture and with a total of 42 tugs available, the combination will clearly be an important player in the growing market of Brazil, operating in major ports including Rio Grande, Itajai, Santos and Salvador. The second joint venture, in which Saam holds a 51% stake, involves towage activities in Panama and Canada (Smit) and Mexico (Saam). A total of 58 tugs will operate in this combined fleet with a presence in: Prince Rupert and Vancouver in Canada; Manzanillo, Balboa and Colon Container Terminal in Panama and Veracruz, Lazaro Cardenas, Altamira and Tuxpan in Mexico. The total value of the Smit and Saam assets that have been contributed to SST is comparable, the joint venture being formed without an equity contribution by either party.

Smit (now part of the giant Royal Boskalis Westminster N.V. group) operates towage and salvage services within the group. Boskalis also has a strategic partnership in terminal services provider Smit Lamnalco. For Saam, towage is just part of their overall operation which has three divisions: Port Terminals, Logistics and Tugboats. With the Smit alliance, Saam’s tug division becomes fourth largest global operator with 186 units, operating at 79 terminals in 14 countries in America.

By Peter Barker