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May 18, 2010

BAE Systems to buy Atlantic Marine

BAE Systems says it has entered into a definitive agreement to acquire Atlantic Marine Holding Company (Atlantic Marine) from JFL-AMH Partners, LLC, a portfolio company of the private equity firm J.F. Lehman & Company, for a cash consideration of $352 million.

Atlantic Marine is a privately held vessel maintenance, repair, overhaul and conversion (MROC), marine fabrication, and ship construction services provider with operations at Mayport and Jacksonville, Florida; Moss Point, Mississippi; and Mobile, Alabama.

The acquisition does not include Atlantic Marine's Boston and Philadelphia operations, which will be retained by JFL-AMH Partners, LLC. The acquisition will be funded from BAE Systems' existing cash resources.

The deal would seem to end ambitions to make Atlantic Marine a player in the newbuilding market, where its last venture was the ill-fated attempt to put together Jones Act products tankers for AHL Shipping using the "virtual shipyard" concept.

"BAE Systems' strategy for our ship repair business is successfully growing marine sustainment activities in surface ship repair, as well as migrating our capabilities into naval modernization and upgrade," said Linda Hudson, President and CEO, BAE Systems, Inc.. "The acquisition of Atlantic Marine's operations, highly skilled workforce, and marine fabrication capabilities will enhance BAE Systems' ability to serve customers in the naval support and upgrade sector

Atlantic Marine employs approximately 1,000 people and will become part of BAE Systems' Ship Repair business. The acquisition will complement BAE Systems' existing ship repair and upgrade capabilities to further serve the U.S. Navy and other maritime customers.

BAE Systems Ship Repair is part of BAE Systems, Inc., the U.S. subsidiary of BAE Systems plc (LON:BA).

BAE Systems says the acquisition is consistent with its strategy to address anticipated growth in Readiness & Sustainment activity within its home markets. The addition of Atlantic Marine will enhance BAE Systems' ability to support current and future U.S. Navy home-porting strategies and broaden its customer base.

The proposed acquisition is conditional, among other things, upon receiving certain U.S. regulatory approvals and is expected to close in the third quarter of 2010.


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