Navios Maritime Partners, an international owner and operator of dry cargo and tanker vessels, agreed to acquire a 36-vessel drybulk fleet for a gross purchase price of $835.0 million, including the assumption of $441.6 million of bank liabilities, bareboat obligations and finance leasing obligations, subject to debt and working capital adjustments (the “Transaction”), from Navios Maritime Holdings Inc. (“Navios Holdings”) (NYSE:NM).

The 36-vessel drybulk fleet consists of 26 owned vessels and 10 chartered-in vessels (all with purchase options) with a total capacity of 3.9 million dwt and an average age of 9.6 years. Assuming Clarksons’ 1-YR TC rate (as of July 22, 2022) and certain operating cost assumptions⁽¹⁾, the acquired vessels are expected to generate approximately $164.0 million of estimated EBITDA and $81.5 million of estimated free cash in 2023.

This acquisition builds upon Navios Partners’ strength in diversification and provides Navios Partners with:

• A young, known, en-bloc fleet of 36 vessels at an opportune time in the drybulk market
• Increased scale – post transaction the drybulk and total fleet will increase by 67% and 24%, respectively. NMM will have the third largest drybulk fleet, and the second largest fleet, of US publicly traded companies (based on number of vessels)
• Rebalanced segment exposure
• A migration path to a younger, more carbon efficient fleet supported by opportunistically selling older, less carbon efficient vessels
• Compelling financial returns (based upon the aforementioned 2023 financial estimates)
  • $835.0 million gross purchase price
  • $393.4 million estimated equity
    • EBITDA multiple: 5.1x (Purchase price/ estimated EBITDA)
    • Unlevered yield: 20% (estimated EBITDA/gross purchase price)
    • Free cash return on equity: 21% (estimated free cash/estimated equity)

Following the completion of the Transaction, Navios Partners will own and operate a fleet comprised of 90 drybulk vessels, 49 containerships and 49 tanker vessels, including 22 newbuilding vessels to be delivered through the first quarter of 2025.

Approvals

The Transaction was negotiated and unanimously approved by the Conflicts Committee of Navios Partners. The Transaction was also unanimously approved by full board of directors of Navios Partners.

Transaction Closing

The closing of the transaction is subject to customary closing conditions, including consent of the existing mortgage banks.

The first closing involving the transfer of 15 vessels will be completed on or about July 29, 2022, while the second closing involving the remaining 21 vessels will be completed in the third quarter of 2022.

Advisors

Jefferies LLC and S. Goldman Advisors LLC served as financial advisors to the Conflicts Committee of Navios Partners. Fried, Frank, Harris, Shriver & Jacobson LLP acted as legal advisor.

Details of acquired fleet

⁽¹⁾ Operating assumptions include among others: Operating expenses and general and administrative expenses of the acquired fleet in accordance with the existing rates of Navios Partners, charter-in expenses, debt service cost and sale and leaseback payments as per existing agreements of Navios Holdings to be assumed by Navios Partners.

⁽²⁾ Purchase option in the form of the right of first refusal and profit share on sale of vessel.