BAE Systems Announces Agreement to Acquire Atlantic Marine

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News Release

BAE Systems Announces Agreement to Acquire Atlantic Marine

18 May 2010 | Ref. 097/2010

ARLINGTON, Virginia - BAE Systems today announced 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.

"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. 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," said Linda Hudson, President and CEO, BAE Systems, Inc.

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.

The acquisition is consistent with BAE Systems' 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.

[buglerbilly]

BAE Acquires U.S. Ship Repair Yards

By ANDREW CHUTER

Published: 18 May 2010 16:54

LONDON - Britain's BAE Systems has added to its U.S.-based naval maintenance and repair business with a $352 million acquisition of the bulk of Atlantic Marine's facilities from private equity company J.F. Lehman.

BAE will get Atlantic Marine operations at Mayport and Jacksonville, Fla.; Moss Point, Miss.; and Mobile, Ala.

Lehman will retain facilities at Boston and Philadelphia.

The British-based company already operates four U.S. ship repair yards acquired along with United Defense Industries in 2005.

Atlantic Marine provides maintenance, repair, overhaul and conversion, fabrication and ship construction services to the military and commercial sectors.

"The priority is to provide fabrication and readiness and sustainment capabilities to the U.S. Navy. There is no suggestion at the moment of us entering the construction business," said a BAE spokesman here.

Linda Hudson, president and chief executive of the company's U.S. operations, said, "BAE's 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."

The spokesman said the company did not believe that any outstanding issues relating to the $400 million fine by the Justice Department for making false statements about the company's compliance with the Foreign Corrupt Practices Act would affect regulatory approval. BAE said in its statement it expected to close the deal in the third quarter of the year.

For the year ended Dec. 31, the business being acquired generated sales of $308 million.

In a statement, BAE said the group anticipates continued strong demand for naval support capabilities in the United States.

"The acquisition is consistent with BAE Systems' strategy to address anticipated growth in readiness and sustainment activity within its home markets. The addition of Atlantic Marine will enhance BAE Systems' ability to support current and future U.S. Navy homeporting strategies and broaden its customer base," the statement said.

The acquisition of Atlantic Marine is the first undertaken by BAE since Hudson took over as the boss of BAE Systems Inc. at the start of this year.

It is BAE's first acquisition of any substance in the United States since the company announced in 2007 it was buying MTC Technologies for $450 million.

Last year, BAE boosted its U.K. warship business by acquiring the VT Group's 45 percent share of the BVT Surface Fleet business. In the last few months, it has also set up a support joint venture with Abu Dhabi Shipbuilding and is exploring opportunities in the Indian naval market.