January 21, 2008
Todd buys shipyard, cuts dividend
Todd Shipyards Corporation (NYSE:TOD) today announced that it has signed an agreement to purchase the assets of Everett Shipyard, Inc. ("ESY"). ESY performs ship repair work for a range of government and commercial customers at two locations in Everett, Washington.
Todd will form a new subsidiary, Everett Ship Repair & Drydock, Inc. ("Everett"), to continue ESY's current shipyard operations.
On closing of the transaction, the new subsidiary intends to enter into an employment agreement with ESY's current President, Kevin Quigley. Mr. Quigley will continue to be responsible for the operation of the shipyard.
Todd's transaction with the owners of ESY includes capital funds to purchase and improve a 1,000 ton drydock that was recently added to ESY's operations, allowing Everett to compete in a broader market of marine repair and overhaul opportunities, as well as the build out of a ship repair facility on a newly leased waterfront parcel at the Port of Everett.
ESY has a collective bargaining agreement with the International Brotherhood of Boilermakers, Local 104 and the United Brotherhood of Carpenters, Local 1184. The new entity will continue to operate as a union yard by fully recognizing and becoming signatory to ESY's existing labor agreements. The new yard intends to employ the workforce currently employed by ESY.
Several conditions of the sale remain to be satisfied, including obtaining the consent of the Port of Everett which is ESY's landlord. The parties are targeting February 15, 2008 as the closing date. It is anticipated that the acquisition of Everett will be accretive to Todd's earnings. Todd and ESY have not disclosed the purchase price for the transaction.
ESY has operated a successful ship repair operation performing pier side repair and overhaul work for numerous customers, including Washington State Ferries and the United States Navy, since the 1960s.