Delaware North Companies, one of the nations largest privately held companies, is selling its Delta Queen Steamboat Company river operation to Ambassadors International, which already owns a similar paddlewheel river operation in American West Steamboat Company.
The Delta Queen Steamboat Company owns and operates a three-vessel fleet, which includes the 436-passenger American Queen, the 416-passenger Mississippi Queen and the 174-passenger Delta Queen. Joe Ueberroth, president and CEO, Ambassadors International, said the combination of the two river companies takes regional businesses and turns them into a national, American cruise company.
The new group will have five vessels with 1,400 berths. The two operations will be combined and led by David Giersdorf, Ueberroth said. Giersdorf is a former Holland America Line senior executive and the current president of American West Steamboat Company. The transaction is subject to the approval of certain debt covenant amendments by the U.S. Department of Transportation and a bondholder, as well as customary closing conditions, and is slated for closing by the end of April.
Under the terms of the agreement, Ambassadors Cruise Group will acquire the three vessels and associated operating assets of the Delta Queen Steamboat Company for $3 million in cash, the assumption of $9 million of customer deposits and the assumption of $35 million of fixed-rate debt payable through 2020 and guaranteed by the U.S. Maritime Administration.
In addition, the transaction includes contingent consideration of 100,000 shares of Ambassadors International common stock to be granted to the Delta Queen Steamboat Company if certain future financial targets are met in the three years following the close of the transaction. It is been a very tough year for Delta Queen because of Hurricane Katrinas damage to New Orleans, where some of the lines cruises originate and where the river line is headquartered. Delta Queen is Americas oldest cruise line, dating back to 1890.
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