Tag - Nm

www.navios.com
(NYSE:NNA.U)
Priced June 25
$220 million proceeds
$275 million post-money valuation

In college, one of my best friends decided that my middle initial stood for “cynic.” Well, even my cynical self was blown away by the very idea of Navios Marine Acquisition. I can just picture a bunch of investment bankers sitting around a J.P. Morgan Chase conference room, wracking their brains to figure out how to earn fees in a market so terrible that only SPACs and dry-bulk shipping seem to generate any interest. (A SPAC, or special purpose acquisition company, is a blank-check deal in which investors give a management team money in hopes that they will make a good acquisition with it.) Then, the lightening bolt hits. “I’ve got it!” one of the well-clad folks shouts. “A dry-bulk SPAC!” And thus, Navios Maritime Acquisition is born.

The good news? The SPAC is sponsored by Navios Maritime Holdings (NYSE:NM), a Greek shipping company. Navios specializes in dry-bulk shipping, and the SPAC will instead look to acquire companies that handle liquid cargo, containers, or shipping logistics. One interesting wrinkle is that Navios Maritime Holdings itself was part of a blank-check company acquisition. It was acquired in 2005 by International Shipping Enterprises, a SPAC organized by Angeliki Frangou, who now serves as the CEO of both Navios Maritime Holdings and Navios Maritime Acquisition. She is also the CEO of Navios Maritime Partners L.P. (NYSE:NMM), which is an affiliate of Navios Maritime Holdings. Global demand for shipping is strong because of the growth of trade to and from China and India, so the various Navios businesses have great prospects.

Despite the fact that the board of directors is made up of people with experience in both shipping and finance, there are a few potential conflicts. Namely, Navios Maritime Holdings and Navios Maritime Partners are also looking to make acquisitions. The plan is for Holdings to acquire dry-bulk companies except for ships that are Panamax (maximum size to go through the Panama Canal) or Capesize (too large to go through the Suez Canal) class, Partners to acquire Panamax and Capesize ships, and Acquisitions to consider everything else. It’s possible that these companies, with their overlapping interests and managers, would end up cutting deals that benefited . . .

When Paragon Shipping Inc. (Nasdaq: PRGN) became a public company last August, investors who didn’t set sail with the initial offering priced at $16 might have figured that they had missed the boat. Or not.

The Greek shipping company, formed in 2006, immediately faced some rough seas, with its stock price falling nearly 10% on Paragon’s first day of trading. Put an asterisk next to that drop, however, because on that day, Aug. 10, the U.S. stock markets were roiling through one of their all-too-typical gyrations southward, with the Dow Jones Industrial Average sinking as much as 320 points during the trading session.

Since then, shares of Paragon have been buffeted by the economic headwinds generated in the United States, which have blown across the globe. The young stock crested at $27.34 on Oct. 29, and recently sank as low as $12.51, on Jan. 22.

Analysts who are tracking Paragon don’t necessary believe this is a shipwreck waiting to happen. According to Thomson Financial, two analysts have Paragon at a “buy” rating, while another rated it a “hold.” The median price target calculated by Thomson is a healthy $26.50 — above Monday’s closing price of $18.

Industry estimates place the demand for seaborne dry-bulk shipping growing at better than 6% annually since 2001. While the U.S. economy struggles, the rest of the world is doing all right, with global output having grown about 5% last year. Demand for dry-bulk shipping — Paragon’s specialty — has been rising substantially for more than a decade, and the company has routes serving high-growth nations China and India, as well as other parts of Asia.