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SEACOR Holdings Inc

SEACOR Holdings Inc.

2200 Eller Drive
P.O. Box 13038
Fort Lauderdale, Florida 33316
U.S.A.
Telephone: (954) 524-4200
Web site: http://www.seacorholdings.com

Public Company
Incorporated:
1989 as SEACOR Holdings Inc.
Employees: 5,035
Sales: $972.0 million (2005)
Stock Exchanges: New York
Ticker Symbol: CKH
NAIC: 483111 Deep Sea Freight Transportation; 551112 Offices of Other Holding Companies

SEACOR Holdings Inc. is involved in a number of transportation and support activities. Much of its business comes from the offshore oil industry, for which SEACOR supplies helicopters and vessels. SEACOR also operates a fleet of petroleum and chemicals tankers and hauls dry cargo on river barges. The company also has an environmental services segment. The company has operational headquarters in Houston and principal executive offices in Fort Lauderdale. It has more than 300 vessels and 140 helicopters.

NICOR ORIGINS

SEACOR Holdings Inc. was formed in late 1989 to take over NICOR Marine Inc., the marine supply subsidiary of Illinois utility NICOR, Inc. NICOR had built this business via the December 1980 acquisition of Arcadian Marine Service, Inc.; however, by the end of the decade it was proving to be an unprofitable sideline, and NICOR decided to unload the unit to focus on its core activities.

SEACOR investors, who included former Secretary of the Treasury William Simon, were led by Charles Fabrikant, an attorney specializing in environmental and maritime law. At the time of the leveraged buyout, NICOR Marine owned 35 vessels and was managing another half dozen for other parties. Most were operating in the Gulf of Mexico but a handful of them were active in Africa. The types of vessels SEACOR operated were called work boats; these included simple craft for ferrying cargo to oil platforms as well as the more powerful anchor handlers that were capable of positioning semi-submersible rigs.

SEACOR had revenues of $47.7 million in 1991. Following the passage of the U.S. Oil Pollution Act, SEACOR diversified into environmental services through a joint venture with Marine Pollution Control Corp. called National Response Corp. Four years later SEACOR bought out its partners in this venture, Jim and Mark Miller. The company went public on the NASDAQ in December 1992 in an initial public offering that raised $24 million. By end of the year the company had more than 60 vessels after buying seven from OMI Petrolink Corp.

SEACOR also expanded its geographic reach through joint management ventures with England's Vector Offshore in the North Sea and Paris-based Feronia International Shipping (FISH) off West Africa. The latter arrangement, launched with two vessels, was expanded to include 27 workboats by the end of 1993 and dubbed "SEAFISH." In 1994 the company created the SEAVEC pool with Bermuda's TOISA Ltd. to manage 17 vessels in the North Sea.

ON THE ACQUISITION
TRAIL IN 1995

In the first half of the decade SEACOR bought about 20 vessels from France's Compagnie Nationale de Navigation, a unit of Worms & Cie. SEACOR intensified its rate of growth in the mid-1990s. The company added 128 vessels in 1995 though the $73 million purchase of John E. Graham & Sons, a Bayou La Batre, Alabama, firm focused on the Gulf of Mexico. Some real estate and support facilities were also included in the deal and expanded the reach of SEACOR's NRC oil spill cleanup unit. Graham, then owned by Edgar, Glenn, and Clark Graham, employed about 675 people at the time of the acquisition.

SEACOR added some Gulf area work boats through the 1996 acquisition of Cameron, Louisiana's McCall Enterprises Inc. in a $65 million stock swap. The company then entered a new line of business, logistics services, by forming the Energy Logistics Inc. (ELI) joint venture with Baker Energy. ELI soon took over management of a supply station for Mobil Exploration & Producing.

SEACOR SMIT 19972004

In December 1996 Smit Internationale N.V. of the Netherlands sold SEACOR 49 supply vessels in a $140 million cash and stock deal. The purchase was strategically significant in that it extended SEACOR's reach into Southeast Asia, giving it a position in all the world's major offshore markets. The company then had 1,500 employees and more than 300 vessels. SEACOR Holdings was renamed SEACOR SMIT Inc. in May 1997. However, it would revert to its old name seven years later. SEACOR bought out Smit Internationale's stake in February 1998 for $37 million. The two companies remained involved in some joint ventures.

The 1997 acquisition of Galaxie Marine Service Inc. added another two dozen vessels. SEACOR paid $24 million, mostly in cash. Galaxie had been founded by the Felterman family, some of whom stayed with SEACOR after the acquisition.

SEACOR was also having new boats built. This allowed it to bring larger, more modern craft into the Gulf of Mexico than had previously been the standard there. To offset its exposure to the cycles of the offshore oil industry, SEACOR diversified into inland barges. Barge operator SCF was acquired by SEACOR in December 2000. A multi-year expansion program for the barges fleet was launched in 2001. By this time, SEACOR's fleet numbered 300 vessels. It also had interests in a number of related ventures, including a small Gulf of Mexico oil rig operator called Chiles Offshore, oil spill specialist National Response Corporation, and the offshore e-mail service Globe Wireless. SEACOR had some of the most modern equipment in an industry that had been slow to invest in capital improvements in the previous decades, Fabrikant told the Wall Street Transcript. Another competitive advantage was SEACOR's global reach. Chiles had raised roughly $170 million in an initial public offering, part of which was used to pay off a debt to SEACOR.

Aviation services also became part of the diversification mix. SEACOR acquired Tex-Air, a Texas-based operator of helicopters for the offshore oil rig support, in December 2002, forming the basis of a new aviation division. By 2005, offshore marine services only accounted for 50 percent of total revenues. The environmental services unit was being enlarged with a number of acquisitions.

SEACOR SMIT was renamed SEACOR Holdings in 2004. Revenues leapt dramatically from $492 million in 2004 to $972 million in 2005, a year in which the company made a couple of major acquisitions.

A NEW ERA IN 2005

SEACOR bought Era Aviation from Rowan Companies, Inc. in January 2005. It sold the fixed-wing assets to an investment group a few months later, keeping Era's helicopter business in Alaska, the West, and the Gulf of Mexico.

COMPANY PERSPECTIVES

SEACOR is uniquely focused on providing highly responsive local service, combined with the highest safety standards, innovative technology, modern efficient equipment, and dedicated, professional employees.

Era claimed to be the oldest helicopter company in the world. In the late 1940s Arkansas native Carl F. Brady launched Economy Pest Control in Yakima, Washington. In 1948 he brought a Bell 47A to Alaska to participate in a federal project mapping the state. The company, which became known as Economy Helicopters, soon began supporting the oil industry. It was renamed ERA Helicopters in 1958 after merging with California's Rotor Aids Inc. Rowan Companies Inc. of Houston acquired Era in 1967 for a reported $2.5 million, allowing it to expand into some of the world's largest oil-producing areas: the Gulf of Mexico, the Middle East, and Africa. In 1978 Jet Alaska was acquired, which soon grew into a leading regional airline. Era also bought up other Alaska helicopter companies such as Merrick Inc. and Livingston Copters.

Era expanded internationally in the 1990s, buying a minority stake in the Netherlands' KLM Helicopters in 1990 (this was sold in 1998) and venturing into postglasnost Russia the next year. Era supplied helicopters for U.N. peacekeeping missions in the Balkans and in the mid-1990s operated a pair of Super Puma helicopters for a Chinese offshore drilling project.

SEABULK PURCHASE

In addition to the Era buy, there was a much larger acquisition in 2005. Fort Lauderdale's Seabulk International, Inc. was acquired in July 2005 for about $1 billion. Seabulk was merged with one of SEACOR's subsidiaries. The stock swap was worth about $532 million while SEACOR also assumed $471 million in Seabulk debt.

Seabulk had been formed in 2000 when former Mobil Shipping head Gerhard Kurz had acquired most of the assets of Hvide Marine Incorporated. Hvide dated back to the Port Everglades Towing Co., set up by Norwegian immigrant Hans Hvide with two tugboats in 1958. Previously based in New Orleans, Hvide had nearly gone under in the late 1990s after an overambitious expansion program met with the results of unusually low oil prices. Kurz renamed the business and moved it to Fort Lauderdale, then slowly restored its profitability after selling off non-core assets. In 2002 a couple of investment groups acquired a controlling stake in Seabulk. At the time of its acquisition by SEACOR, Seabulk had 2,500 employees and annual revenues of about $350 million.

Through the Seabulk acquisition, SEACOR gained more than 100 offshore service vessels and a dozen tankers. These included a strong international component with operations in the Gulf of Arabia, Brazil, and the North Sea. The combination of the two companies created an even larger business than leading offshore service vessel specialist Tidewater Inc., which was its only rival active on a global scale. SEACOR ended 2005 with about 300 work boats, 1,200 barges (mostly dry cargo), and more than 100 helicopters.

Plans to order new tankers for the Seabulk unit were on hold in 2006 due to the aftereffects of Hurricane Katrina on the company's preferred Louisiana shipyard. Much of its tanker fleet was being chartered to Chevron Shipping.

Frederick C. Ingram

PRINCIPAL SUBSIDIARIES

Energy Logistics, Inc.; Era Helicopters, LLC; National Response Corporation; The O'Brien's Group, Inc.; Seabulk International, Inc.; SEACOR Environmental Services Inc.; SEACOR Marine, LLC; SEACOR Offshore Services Inc.; SCF Marine Inc.

PRINCIPAL DIVISIONS

Offshore Marine; Inland River; Helicopter Services; Environmental; Logistics.

KEY DATES

1980:
Illinois utility NICOR Inc. acquires Arcadian Marine Service.
1989:
SEACOR Holdings is formed to buy NICOR's marine services business.
1991:
National Response Corp. environmental services unit is formed through joint venture.
1992:
SEACOR goes public.
1995:
Graham & Sons marine assets are acquired for $73 million.
1996:
Dozens of vessels are acquired from SMIT Internationale and McCall Enterprises; ELI logistics venture is formed.
1997:
Acquisition of Galaxie Marine Service adds two dozen vessels.
2002:
Helicopter operator Tex-Air is acquired.
2004:
SEACOR Smit is renamed SEACOR Holdings.
2005:
Era Helicopters is acquired from Rowan Companies, Inc.; Seabulk International is purchased for $1 billion.

PRINCIPAL COMPETITORS

Tidewater Inc.

FURTHER READING

Baldwin, Tom, "Very Modern Workboats," JoC Week, August 13, 1997.

Bray, Julian, "Seacor to Buy Six Vessels from CNN," Lloyd's List International, June 11, 1996.

Campbell, Melissa, "Owner of Alaskan Aviation Firm Reflects After Sale to Houston Company," AK Journal of Commerce, January 16, 2005.

"CEO/Company Interview: Charles Fabrikant, Seacor Smit Inc.," Wall Street Transcript, October 23, 2000.

"CEO/Company Interview: Charles Fabrikant, Seacor Smit Inc.," Wall Street Transcript, April 30, 2001.

"Chief Executive Officer Plays Seabulk Cards Close to His Chest," Tradewinds, September 29, 2006, p. 27.

Danner, Patrick, "Seacor Holdings Will Take Over Seabulk," Miami Herald, March 18, 2005.

Dickey, Alan, "Seacor Pays $140M for Smit Fleet," Lloyd's List International, October 15, 1996.

DuPont, Dale K., and David Krapf, "Vessel Mania: Seacor-Seabulk Merger Creates Another Big OSV Player," Workboat, May 2005, pp. 42 +.

"Dutch Smit Sells Smit Seacor Stake," Reuters News, February 26, 1998.

"Environmental Firm, Seacor Unite to Offer Spill-Response Service," Journal of Commerce and Commercial, November 6, 1991, p. 1B.

Era Helicopters LLC, "Era's History," http://www.erahelicopters.com/history.htm, 2006.

Fan, Eliza, "Analysts Back Seacor's $75 Million Deal with John E. Graham," Oil Daily, May 23, 1995, pp. 2 +.

Felsted, Andrea, "Support Vessel FocusMobil and ELI Take Logistics Alliance Step," Lloyd's List International, July 18, 1996.

"Fleets to Face 'Just In Time' Practices," Lloyd's List International, April 3, 1996.

Glass, Joel, "Seacor Completes Graham Purchase," Lloyd's List International, September 21, 1995.

Joshi, Rajesh, "Kurz Bullish As Seabulk Makes a Noise in Historically Quiet Period," Europe Intelligence Wire, May 9, 2005.

McLaughlin, John, "Seacor Announcement Is Chronicle of a Deal Foretold," Europe Intelligence Wire, March 22, 2005.

Mulrenan, Jim, "Seacor Takes Control of NRC," Lloyd's List International, March 21, 1995.

"Seacor Boosts Clean-Up Arm," Lloyd's List International, May 24, 1995.

"Seacor Closes Graham Deal," Oil Daily, September 12, 1995, p. 5.

"Seacor Completes Purchase of McCall Enterprises," New York Times, June 1, 1996.

"Seacor Holdings, Feronia Intl. to Expand Joint Arrangements," Dow Jones News Service, November 23, 1993.

"Seacor Sets Up West African Joint Venture," Lloyd's List International, July 9, 1993.

"Smit Int. Seals Fleet Sale to Seacor," Reuters News, December 20, 1996.

Smith, Whit, "Q&A with Seacor Smit's Charles Fabrikant Chairman, President, and CEO," Marine Log, July 1, 1998, p. S3.

Tinsley, David, "Seacor Newbuilding Marks Evolutionary Step in OSV Design," Lloyd's List International, July 17, 1996.

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