Texas tea travels by sea: Navios Maritime Midstream LP sets terms for $162 million IPO

Navios Maritime Midstream Partners LP, an MLP formed by Navios Maritime to operate four contracted crude oil tankers, announced terms for its IPO on Tuesday. The Monte Carlo, Monaco-based company plans to raise $162 million by offering 8.0 million shares at a price range of $19 to $21. At the midpoint of the proposed range, it would command a fully diluted market value of $381 million.

Business
Navios Maritime Midstream LP's fleet of four very large crude carriers (VLCCs) include two vessels built in 2001 with contracts expiring in 2017 and two vessels built in 2010 and 2011 with contracts expiring in 2025 and 2026. Its VLCCs are contracted to China-based COSCO Group and Taiwan-based Formosa Petrochemical.

Navios has indicated that it may also acquire refined petroleum product tankers, chemical tankers and LPG tankers, but lists 7 VLCCs with various build dates and contract expiration dates that it has the option to acquire from its direct parent, Navios Maritime Acquisition. Navios Maritime Acquisition (NYSE: NNA) will have general partner interests, and is controlled by Navios Maritime Holdings (NYSE: NM).

Recent financials and distributions
Revenue remained flat at $48 million for the nine months ended September 30, 2014. Pro forma net income was $16.5 million during the period. It forecasts $64 million in revenue for the twelve months ended September 30, 2015. The MLP had pro forma $126 million of debt on its balance sheet and $381 million of assets.

Navios Maritime Midstream Partners LP, which was formed in 2014 and booked $64 million in predecessor revenue for the 12 months ended September 30, 2014, plans to list on the NYSE under the symbol NAP. BofA Merrill Lynch, Citi, J.P. Morgan, Credit Suisse and Wells Fargo Securities are the joint bookrunners on the deal. It is expected to price during the week of November 10, 2014.