Navios Maritime Midstream Partners LP (NAP) is a growth oriented limited partnership formed to own, operate and acquire crude oil tankers under long-term employment contracts. It is based in Monte Carlo, Monaco.
Nine other new companies are scheduled for the week of Nov. 10, 2014. The full IPO calendar is available at IPOpremium.
Manager, Joint-managers: BofA Merrill Lynch, Citigroup, J.P. Morgan
Co-managers: Credit Suisse, Wells Fargo Securities, Deutsche Bank Securities, S. Goldman Advisors LLC
End of lockup (180 days): Tuesday, May 12, 2015
End of 25-day quiet period: Monday, December 8, 2014
NAP scheduled a $162 million IPO with a market capitalization of $187 million at a price range midpoint of $20 for Thursday, Nov. 13, 2014 on NYSE.
Navios Maritime Midstream Partners IPO Report
Summary
NAP is a growth oriented limited partnership formed to own, operate and acquire crude oil tankers under long-term employment contracts.
One of NAP’s key strengths is its relationships with Navios Maritime Holdings (NYSE: NM) $600 million market cap, and Navios Maritime Acquisition (NYSE: NNA) $448 million market cap.
|
Valuation Valuation Ratios |
Mrkt Cap (mm) |
Price /Sls |
Expected yield |
Price /BkVlue |
Price /TanBV |
% offered in IPO |
|
. |
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Navios Maritime Midstream Partners LP (NAP) |
$198 |
n/a |
8.25% |
0.8 |
1.8 |
82% |
Conclusion
Neutral
Expected yield of 8.25%
Key strengths with NM and NNA
Price-to-book of .8, price-to-tangible book of 1.8
Business
NAP is a growth oriented limited partnership formed to own, operate and acquire crude oil tankers under long-term employment contracts.
In the future, to the extent opportunities arise, NAP may also seek to own, operate and acquire refined petroleum product tankers, chemical tankers, and LPG tankers under long-term employment contracts.
Consistent with the chartering strategy of NAP’s affiliate, Navios Maritime Partners (NYSE: NMM), which charters its dry bulk and container vessels under long-term employment contracts, NAP intends to charter its vessels under long-term employment contracts to international oil companies, refiners, and large vessel operators.
NAP’s Relationships with Navios Maritime Holdings and Navios Maritime Acquisition
One of NAP’s key strengths is its relationships with Navios Maritime Holdings (NYSE: NM) $60 million market cap, and Navios Maritime Acquisition (NYSE: NNA) $448 million market cap.
Navios Maritime Holdings is one of the world’s largest independent drybulk operators with a market capitalization of approximately $635.0 million as of September 30, 2014.
Navios Maritime Holdings’ business was established by United States Steel Corporation in 1954 and has over 50 years of experience working with raw material producers, agricultural traders and exporters, and industrial end-users. The key members of Navios Maritime Holdings’ management team have on average over 20 years of experience in the shipping industry.
Navios Maritime Acquisition, NAP’s parent
Navios Maritime Acquisition, NAP’s parent, owns a large fleet of modern crude oil, refined petroleum product and chemical tankers providing world-wide marine transportation services and has a market capitalization of approximately $411.0 million as of September 30, 2014.
Navios Maritime Acquisition’s strategy is to charter its vessels to international oil companies, refiners and large vessel operators under long, medium and short-term charters. Navios Maritime Acquisition is committed to providing quality transportation services and developing and maintaining long-term relationships with its customers.
NAP intends to use Navios Maritime Holdings’ and Navios Maritime Acquisition’s extensive experience and relationships to secure long-term time charters for its vessels.
Competition
The market for international seaborne crude oil transportation services is fragmented and highly competitive.
Seaborne crude oil transportation services generally are provided by two main types of operators: major oil company captive fleets (both private and state-owned) and independent ship owner fleets.
In addition, several owners and operators pool their vessels together on an ongoing basis, and such pools are available to customers to the same extent as independently owned and operated fleets.
Many major oil companies and other oil trading companies also operate their own vessels and use such vessels not only to transport their own crude oil but also to transport crude oil for third party charterers in direct competition with independent owners and operators in the tanker charter market. Competition for charters is intense and is based upon price, location, size, age, condition and acceptability of the vessel and its manager. Due in part to the fragmented tanker market, competitors with greater resources could enter the tanker market and operate larger fleets through acquisitions or consolidations and may be willing or able to accept lower prices than us, which could result in NAP’s achieving lower revenues from its vessels.
5% shareholders post-IPO
Navios Maritime Acquisition 55.5%
Dividends
The amount of the minimum quarterly distribution is $0.4125 per unit, or $1.65 per unit per year, or 8.25% at the price range midpoint of $20.
Use of proceeds
NAP expects to receive $148 million from its IPO and use it for the following:
primarily to fund a portion of the purchase price of the capital stock in the subsidiaries of Navios Maritime Acquisition that own the four vessels in its initial fleet.
