The Acquisition of GDS Holding by Moran Environmental RecoveryA Legacy of Underwater Excellence
In 1979, Tim Beaver, John Graham, and a small group of professional divers banded together to form GDS Holding, Inc. (Global), which provided diving services, ship husbandry, marine construction, small vessel salvage, and spill response services in the Puget Sound region. Their philosophy was to provide outstanding service to the maritime community while maintaining the highest level of safety.
“We never wanted to tell a customer that we couldn’t do something,” said John Graham, co-founder and a majority shareholder of Global. “When other companies did that, their customers came looking to us, and we never let them down.”
Incorporated in Seattle, WA in 1980, Global became known as the one to call for any underwater task and soon positioned itself as a global leader in marine construction, commercial diving, environmental services, and marine casualty response. The company grew to six locations in the western part of the U.S. and serviced both domestic and international clients.
“Global has endured and grown over four decades of changing markets, technologies and economies by maintaining a consistent approach to safety, reliability and high-quality work,” said Tim Beaver, co-founder and a majority shareholder of Global. “Throughout, it has been the people that have held that vision, performing under the most strenuous and difficult conditions with smart management, reliable gear and journeyman skill. For these people, we are very grateful.”
After nearly 30 successful years in business, the owners reached a major crossroad in 2008 – the younger management team wanted to stay with the business and grow, while the majority shareholders desired liquidity. Both parties agreed to hire an investment bank to represent them in a sale.
GulfStar was chosen due to its energy and diving company expertise, but the transaction did not occur right away because of the financial market upheaval at the time. Fast forward 10 years and GulfStar was selected again due to the relationship it had developed with the owners and management as well as its continued expertise in the market space. Global had further evolved into a leading marine infrastructure service provider.
GulfStar dives deep into the sale process
The GulfStar team positioned the company as a marine infrastructure player – less dependent on the energy markets – and set out to market Global to a targeted list of financial and strategic buyers.
On that list was Moran Environmental Recovery (MER), a subsidiary of Moran Towing Corporation and an integrated supplier of environmental, industrial, mechanical, and commercial diving services. MER entered into the commercial dive industry in 2014 with several targeted acquisitions. The acquisition of Global would significantly expand MER’s strategic position in the marine infrastructure sector as well as bring talented management. MER emerged as the ultimate buyer.
Despite several unexpected challenges and delays during the closing process, including a government shut-down, the bankruptcy of a major utility client and the need for the parent to recapitalize its balance sheet, the deal closed on February 26, 2019.
Global’s management team found a strategic partner with substantial capital to realize significant growth opportunities, while the majority shareholders achieved 100% liquidity. For MER, this acquisition represented an excellent complement to its existing commercial dive operation as well as an opportunity to further grow and expand its environmental business and geographic reach. Global continues to operate under its current brand, as a wholly-owned subsidiary of MER.
GulfStar did a fantastic job from the start. Their team understood our company, found the right buyer, kept an eye on every detail and followed through until the transaction was complete. We are very grateful to all the people that made this transaction a success and especially to GulfStar for making it happen.
Tim Beaver and John Graham, Majority Shareholders of Global
We have known the owners of Global for more than 10 years and have enjoyed watching their company evolve from a local diving contractor into a major marine infrastructure services provider. This is a very strategic acquisition that should greatly benefit the stakeholders of MER and Global. We found the best buyer for this wonderful client.
Kent Kahle, Managing Director of GulfStar Group
GulfStar advantages in a sale to a strategic
• Positioning the client to appeal to a buyer’s acquisition objectives
• Ability to help structure transactions to meet both parties’ objectives
• Ongoing guidance and advocacy beyond the initial letter of intent
• Ability to anticipate and mitigate potential challenges proactively