Offshore vessel operator Tidewater Inc. (TDW) is making a serious move in Brazil. On Monday, the company announced it's buying Wilson Sons Ultratug Participações S.A. and its affiliate Atlantic Offshore Services S.A. for about $500 million in cash. That includes some assumed debt, but the important part is the "cash" bit—Tidewater is paying for this entirely with money it already has on hand.

The board has signed off, and if all goes well with regulators (including Brazil's antitrust body, CADE), the deal should wrap up in the late second quarter of 2026. That's a bit of a wait, but in the world of big offshore acquisitions, these things take time.

So why Brazil? According to Tidewater CEO Quintin Kneen, it's pretty simple: "The Brazilian offshore vessel market is one of the largest and most compelling in the world." This acquisition, he said, "marks yet another important milestone in the continued evolution of Tidewater" and will "enhance our presence in the country."

Let's talk about what Tidewater is actually getting. WSUT operates 22 platform supply vessels (PSVs). Twenty-one of those are working in Brazil right now. For Tidewater, which currently has just six vessels in the country, this is a massive expansion. Overnight, its Brazilian fleet jumps from six to 28 ships. Globally, the company's fleet will grow to 231 vessels, which includes 213 offshore support vessels and a handful of other support boats.

Here's another interesting detail: nearly 90% of WSUT's fleet was built in Brazil. That gives Tidewater a leading position in locally built PSVs and, perhaps more importantly, access to something called REB tonnage rights. In plain English, that could make it easier for Tidewater to import internationally-flagged vessels into the Brazilian market down the line.

Now for the financials. Tidewater expects WSUT to bring in about $220 million in revenue over the first year after the deal closes. The gross margin on that revenue is projected to be a healthy 58%. Of course, there are costs too—Tidewater anticipates adding roughly $14 million in annual expenses related to the acquisition.

Perhaps the most intriguing part of the deal is WSUT's contract backlog. It currently stands at $441 million, but here's the kicker: a lot of those contracts were signed at below-market rates. For Tidewater, that's not a bug; it's a feature. As those contracts come up for renewal, Tidewater has the opportunity to re-price them at higher, current market rates. That means the earnings and cash flow potential here could actually increase over time. The company says the deal should boost both earnings and cash flow per share in 2026 and 2027.

On the financing side, WSUT has about $261 million in debt, provided by Brazilian development bank BNDES and Banco do Brasil. That debt will be rolled over as part of the acquisition, giving Tidewater access to some low-cost, long-term financing. Despite the half-billion-dollar price tag, Tidewater says its net leverage will remain below 1.0x after the deal closes. That's a pretty conservative balance sheet for a company making a move this big.

Speaking of balance sheets, Tidewater had about $428.2 million in cash and equivalents as of September 30, 2025. So it has the dry powder to make this happen without taking on expensive new debt.

Investors seemed to take the news in stride. Tidewater shares were down just 0.52% at $73.00 in premarket trading on Monday. For context, the stock is trading near its 52-week high of $74.20.

So there you have it. Tidewater is betting half a billion dollars that Brazil's offshore energy market is worth a much bigger commitment. They're buying a fleet, a backlog, and a much stronger position in a country that's becoming increasingly important for global energy production. Now we wait for the regulators to give their nod.