Coatings Industry News

Main News Page


Firm Invests in 2 Shipyards’ Future

Tuesday, October 20, 2015

Comment | More

While other area shipyards are undergoing layoffs and facing budget concerns, two Virginia shipyards are about to be purchased by a New York-based investment firm that focuses on “distressed” businesses.

Stellex Capital Management, a private equity firm that invests in and manages U.S. and European corporate assets, entered into a stock-purchase agreement to buy Marine Hydraulics International Inc. (MHI), Norfolk, and Ocean Marine Yacht Center, Portsmouth, The Virginian-Pilot reported Oct. 10.

iStock.com / Catherine Lane
© iStock.com / Catherine Lane

Private equity firm Stellex Capital Management has entered into a stock-purchase agreement to buy Marine Hydraulics International Inc. and Ocean Marine Yacht Center.

Under discussion since February, the companies entered into the agreement Oct. 1, and the deal is expected to close by month’s end. The terms of the transaction have not been disclosed.

The Shipyard Affiliates

With a 30-plus-year history, MHI is a privately owned ship-repair and overhaul contractor that works on U.S. Navy ships. It is owned by its approximately 450 workers.

In addition to the Navy, the marine repair and conversion contractor provides services to commercial ship owners, Military Sealift Command and Maritime Administration and operators worldwide. Services include paint and coatings, structural repair, steel plate fabrication, pipe repair, valve repair and electrical services.

MHI had been operating under American Maritime Holdings for six years, until just one year ago, the umbrella corporation decided to spin it off as its own standalone business.

For the employee-owners, who participate in an employee stock ownership plans, the distribution of funds in its plan is scheduled to occur in November 2016 and November 2017, according to the newspaper.

No changes in employment are expected, the paper adds.

When the deal is complete, MHI will be a wholly owned subsidiary of MHI Holdings LLC, an affiliate of Stellex.  Plans call for MHI’s senior management team to stay on board, while Stellex will take control of the board of directors.

Established in 1989, the Ocean Marine Yacht Center provides refit and repair, dockage and storage for yachts of all sizes. Services include bottom paint; fiberglass and gelcoat repair; repair of engines, transmissions, air conditioning, refrigeration, steering and hydraulic systems; and stabilizer, propeller, shaft and strut repairs.

Providing Stability, Growth

According to its website, Stellex Capital Management focuses on middle-market companies in distress and “special situation opportunities.” The firm identifies and invests in opportunities that have the potential to provide stability, improvement and growth for its portfolio of companies and enhance their value.

iStock.com / blackjake
© iStock.com/ blackjake

Targeting companies in distress, Stellex chose MHI because it wanted to help build and support the shipyard’s strategic vision.

It targets companies that are experiencing some form of financial, operational or industry-driven distress and fall with the aerospace, automotive, consumer products, defense, energy and power, general industrial, infrastructure, and transportation sectors, to name a few.

Stellex chose MHI because it wanted to help build and support the shipyard’s strategic vision, the newspaper reported.

The Virginia Shipyard Environment

Just last month (Sept. 21), BAE Systems Shipyard announced it would be laying off 650 workers from its Norfolk location. This was a 43 percent reduction from a staff of 1,500 employees. The reductions were blamed on a decrease in repair work for Navy ships. This round of layoffs will be effective Nov. 20, local ABC affiliate 13 News Now reported.

Citing similar reasons the previous week Newport News Shipbuilding, owned by Huntingon Ingalls Industries, announced that it would be letting 480 employees go.

These workforce reductions, along with concerns that a full budget will not be passed by the federal government, led two sets of Virginia lawmakers to reach out to the Navy for help, the Daily Press reported Oct. 1.

The first letter came from Reps. Randy Forbes, R-Chesapeake; Rob Wittman, R-Westmoreland; Scott Rigell, R-Virginia Beach; and Robert C. "Bobby" Scott, D-Newport News.

The second was written by Democratic senators: Mark Warner and Tim Kaine.

Citing the potential for more than 2,500 lost jobs without intervention, the letters to Navy Secretary Ray Mabus asked that the Navy consider ways to help stabilize the workload in the short term and the industry as a whole in the long term.

Suggestions included sending lower-priority jobs to private shipyards and hiring those affected by local shipyard layoffs at its Norfolk Naval Shipyard.

"It is our hope that we can work together to increase stability and predictability at the waterfront and sustain the skilled work force that supports our fleet," the letter stated.

"We've asked the Navy to come up with a plan to smooth out these bumps to make sure we are not losing these valuable members of our shipbuilding community who take years and years to acquire these skills," Rep. Wittman told 13 News Now on Oct. 14.

After what he described as a positive meeting with Mabus, Rep. Forbes indicated that Mabus recognizes the problem; Forbes is hopeful that a plan will be developed to help the area shipyards.

Rep. Scott also noted his optimism, indicating that the Navy “has said they’re going to work on it and do the best they can to minimize the damage to the economy.”

   

Tagged categories: Acquisitions; Business matters; Mergers; Newport News Shipbuilding; North America; Program/Project Management; Shipyards; U.S. Navy

Comment Join the Conversation:

Sign in to our community to add your comments.


Advertisements
 
Fischer Technology Inc.

 
KTA-Tator, Inc. - Corporate Office

 
SAFE Systems, Inc.

 
NLB Corporation

 
ABKaelin, LLC

 
HoldTight Solutions Inc.

 
Mitsubishi Gas Chemical America

 
DeFelsko Corporation

 
Modern Safety Techniques

 
Tarps manufacturing, Inc.

 
 
 

Technology Publishing Co., 1501 Reedsdale Street, Suite 2008, Pittsburgh, PA 15233

TEL 1-412-431-8300  • FAX  1-412-431-5428  •  EMAIL webmaster@paintsquare.com


The Technology Publishing Network

PaintSquare the Journal of Protective Coatings & Linings Paint BidTracker

 
EXPLORE:      JPCL   |   PaintSquare News   |   Interact   |   Buying Guides   |   Webinars   |   Resources   |   Classifieds
REGISTER AND SUBSCRIBE:      Free PaintSquare Registration   |   Subscribe to JPCL   |   Subscribe to PaintSquare News
MORE:      About PaintSquare.com   |   Privacy Policy   |   Terms & Conditions   |   Support   |   Site Map   |   Search   |   Contact Us