The shipbuilding company has entered into an agreement to acquire Australian-based BSE Maritime Solutions, in a bid to expand its global support business.
Austal has acquired ship repair and support business BSE Maritime Solutions Group for an estimated $27.5 million.
BSE, which currently supports the Australian Border Force, BAE Systems, Thales and Svitzer, employs approximately 60 permanent staff who will be offered employment with Austal.
As part of the acquisition, Austal will acquire all of the shares in BSE, Brisbane Slipway Holdings, and Brisbane Slipways and Engineering.
The purchase will be funded from Austal’s cash reserves, with the company holding a $272.4 million net cash position as at 30 June 2020.
The agreement, which is subject to a number of customary conditions, is expected to be completed at the end of November 2020.
According to Austal, the acquisition is part of a broader strategy to strengthen the company’s key support business, which has grown at an annual rate of 28 per cent over the past four years, closing the 2020 financial year (FY20) at $360 million.
“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,” Austal CEO David Singleton said.
“In particular, the acquisition provides Austal with dockyard and ship lift capability in the north-east region of Australia – including the Pacific’s largest mobile boat hoist, capable of moving 1,120 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 Cass patrol boats.”
Austal said it expects the new business to generate $5 million in gross earnings over FY21, rising to $11 million by FY25 as more Austal ships covered by current sustainment contracts are delivered to the Commonwealth of Australia.