Eagle Bulk Shipping Merges with Star Bulk Carriers: Creating the Largest U.S. Listed Dry Bulk Shipping Company
Overview
Eagle Bulk Shipping Inc. (EGLE) and Star Bulk Carriers Corp. (SBLK) announced an all-stock merger, creating the largest U.S.-listed dry bulk shipping company with a combined fleet of 169 owned vessels.
The $2.1 billion merger, which valued Eagle at a 17% premium to its pre-deal closing share price, aims to leverage economies of scale, improve trading liquidity, and establish a global leader in dry bulk shipping with significant cost and revenue synergies. Following the announcement, ICR’s Public Relations team was also engaged to assist with merger communications for this transformative deal.
The ChallengeS
Communicating the merger’s value proposition
Articulating the benefits of the merger to various stakeholders, including shareholders, analysts, and the media, is crucial for its success.
- Demonstrating how the merger addresses industry challenges such as fleet modernization and environmental regulations.
- Explaining the financial benefits, including cost synergies and improved valuation potential.
Navigating a complex merger in a fragmented industry with increasingly stringent environmental regulations
Executing a merger between two major players in the dry bulk shipping industry presents numerous challenges, from regulatory approvals to stakeholder communication.
- Ensuring shareholder approval and addressing potential competing offers.
- Navigating regulatory requirements, including SEC filings and antitrust considerations.
Highlights
Overview
Creation of the largest U.S. listed dry bulk shipping company with 169 owned vessels
Combined market capitalization
Approximately $2.1 billion
Expected annual cost and revenue synergies
$50 million
Combined fleet fitted with scrubbers for emissions control
97%
Pro forma net leverage
Approximately 37%
From the client
Our Solution
ICR worked closely with Eagle Bulk Shipping to navigate the complexities of this transformative merger, focusing on clear communication with investors [and employees], highlighting the strategic rationale, and emphasizing the long-term value creation potential of the combined entity.
Strategic messaging and investor communication
ICR developed a comprehensive communication strategy to articulate the merger’s benefits to all stakeholders
- Crafted key messages emphasizing scale advantages, improved liquidity, fleet modernization, and potential for valuation re-rating.
- Prepared management for investor calls, analyst briefings, and media interviews to ensure consistent messaging across all channels. [Conducted extensive preparation sessions with management, including mock Q&A drills, to ensure they were fully equipped to address a wide range of potential questions from investors, analysts, and media.]
Proactive investor and analyst engagement
ICR implemented a targeted outreach program to key investors and analysts to build support for the merger.
- Conducted targeted outreach to key institutional investors to explain the strategic rationale and address potential concerns.
- Crafted a comprehensive script for the joint conference call and webcast, ensuring clear and effective communication of the transaction’s key points, strategic rationale, and expected benefits.
Strategic media relations and market perception management
ICR managed media relations to ensure accurate and positive coverage of the merger announcement.
- Developed a comprehensive press release and supporting materials to clearly communicate the transaction’s key points.
- Coordinated with financial media to secure favorable coverage and manage market perceptions.
Financial analysis and valuation support [or, management of internal communications, merger integration/transition work]
Supporting copy (One-two sentences): ICR provided in-depth financial analysis to support the merger’s valuation and synergy expectations.
- Conducted peer benchmarking and NAV analysis to demonstrate the potential for valuation improvement.
- Developed models to illustrate expected cost savings and revenue synergies to investors and analysts.