Austal Acquires BSE Maritime Solutions
Australian-based shipbuilding group Austal said it has entered into an agreement to acquire compatriot ship repair and support business BSE Maritime Solutions Group.
BSE Maritime Solutions, which operates in Cairns and Brisbane, serves defense, commercial, tourism and luxury vessel customers, including Australian Border Force, BAE Systems, Thales and Svitzer.
The deal, which comes at an enterprise value of A$27.5 million (US$19.6 million), aligns with Austal’s strategy to continue building the its key support business, the company said, noting that revenue from its support segment has grown at an annual rate of 28% over the past four years to reach $360 million (US$256.4 million) in the 2020 financial year, providing reliable ongoing revenue in addition to shipbuilding operations.
Austal Chief Executive Officer David Singleton said, “BSE Maritime Solutions is a quality business and its acquisition aligns with our stated strategy of growing our support division, adding further scale to our operations on the east coast of Australia in addition to our existing support services at Henderson, Cairns and Darwin.
“In particular, the acquisition provides Austal with dockyard and ship lift capability in the northeast region of Australia – including the Pacific’s largest mobile boat hoist, capable of moving 1120 tonnes – supporting our existing and future customers and reinforcing our commitment to grow in the region. It further enhances our in-service support capabilities, currently provided across multiple facilities in Cairns, for the Austal designed and constructed Cape-class and Guardian-class Patrol Boats.”
Austal expects that the new business will generate an EBITDA of A$5 million (US$3.6 million) in FY2021 rising to A$11 million (US$7.8 million) by FY2025 as more Austal ships covered by current sustainment contracts are delivered to the Commonwealth of Australia.
Austal said it will offer employment to the approximately 60 staff employed by BSE Maritime Solutions.
Under the acquisition agreement, which is expected to settle at the end of November 2020 subject to customary conditions, Austal will acquire all of the shares in BSE Maritime Group Ltd, Brisbane Slipway Holdings Pty Ltd, and Brisbane Slipways and Engineering Pty Ltd.
The purchase will be funded from Austal’s cash reserves, with the company holding a $272.4 million net cash position as of June 30, 2020.