Acquisition of Atlantic Brokers Ltd

2nd February 2018

Braemar Shipping Services plc (“Braemar”, the “Company” or the “Group”), a leading international provider of broking, financial advisory, consultancy, technical and logistics services to the shipping, marine, energy, offshore and insurance industries is pleased to announce the acquisition of the entire issued share capital of Atlantic Brokers Holdings Ltd, the holding company for Atlantic Brokers Ltd (together, “Atlantic”), an established broker of physical and financial coal products (the “Acquisition”) for a total consideration of £4.8 million.

Acquisition Highlights

• Atlantic is an established introducing broker for ICE coal and CME Clearport coal futures and options; it is regulated by the Financial Conduct Authority (the “FCA”) and is also a member of the National Futures Association of the United States of America (the “NFA”).

• The Acquisition provides the opportunity to expand the combined Braemar and Atlantic businesses into new markets using Atlantic’s experience and the physical shipping capability and market reach of Braemar.

• As Atlantic is regulated by the FCA, the acquisition will enable Braemar to move into the growth area of commodity derivatives broking.

• The total consideration of £4.8 million is made up of:
- £2.7 million in cash (subject to adjustment based on target net asset value/regulatory capital requirements); and
- £2.1 million to be satisfied by the issue of 804,426 ordinary shares of 10 pence each in the capital of Braemar, representing a price of £2.61055 per share (the volume weighted average closing middle market share price for an Ordinary Share for the 30 consecutive trading days prior to completion).

• Atlantic is led by Tristram Simmonds and Michael Griffin who have over 35 years of combined professional experience in the energy markets and have been broking coal futures since 2001.

• The sellers who are engaged in the business, Tristram Simmonds, Michael Griffin and Kelvin Taaffe (together, the “Working Sellers”), will enter into new service contracts upon completion of the Acquisition. The transaction terms include lock in mechanisms to incentivise the Working Sellers to remain with Atlantic for at least 3 years following completion.

• The cash element of the consideration will be financed from funds to be drawn down under the Company’s existing credit agreement together with the Company’s own resources.

• Atlantic generated revenue and profit before tax for the year ended 30 June 2017 of £4.7 million and £0.6 million respectively.

Acquisition Benefits

• Atlantic will form a new regulated desk within Braemar ACM Shipbroking, enabling the division to offer both paper and physical broking services for the first time. Collaboration between Atlantic and Braemar’s Shipbroking division will give Braemar the opportunity to offer additional services to existing clients.

• The acquisition of Atlantic offers additional growth opportunities for Braemar to expand into new product areas of the brokered commodity futures market, including iron ore derivatives, coking coal and other bulk products.

• Acquiring an established, recognised business will enable rapid integration and the ability to attract new talent.

Comments on the Acquisition from Braemar and Atlantic:

James Kidwell, Chief Executive Officer of Braemar said: “The acquisition of Atlantic marks another step in our stated strategy of growing a diverse maritime business. The Board is continually looking for high quality acquisitions to support our business development strategy and I am delighted to welcome the Atlantic team to Braemar. We look forward to integrating the teams and growing our combined businesses.”

James Gundy, Chief Executive Officer of Braemar ACM Shipbroking said: “This is an exciting move for Braemar which promises an entry into the developing brokered commodity futures market, an area in which our clients have a regular requirement. Acquiring Atlantic, an established business, will enable effective integration with our existing business and provide rapid expansion opportunities for the futures broking team. It will also complement our growing global dry cargo business and allow us to offer a wider range of services to our growing client base.”

Tristram Simmonds, Managing Director of Atlantic said: “At Atlantic, we have long regarded Braemar, particularly its Shipbroking Division, as a business with ambitions and a culture close to our own. We believe that Braemar offers the right opportunity to expand our product offering and continue to grow our business, and that our businesses fit together well. We are very pleased to become part of Braemar and look forward to the future with great optimism.”

About Braemar Shipping Services plc
Braemar Shipping Services plc is a leading international provider of knowledge and skill-based services to the shipping, marine, energy, offshore and insurance industries. Founded in 1972, Braemar employs approximately 850 people in more than 70 locations worldwide across its Shipbroking, Technical, Logistics and Financial divisions.

Braemar joined the Official List of the London Stock Exchange in November 1997 and trades under the symbol BMS.

For more information, including our investor presentations, visit www.braemar.com

Braemar Shipping Services plc press release