Civmec set to acquire ship manufacturer Luerssen Australia for A$20 million

[SINGAPORE] Construction and engineering services provider Civmec will purchase Luerssen Australia from Naval Vessels Luerssen (NVL) Australia for A$20 million (S$16 million) in cash, the company said on Thursday (Jun 26).

Civmec will take ownership of the whole business, including assets, employees and licences. The deal will be funded by the group’s existing cash reserves.

The assets, plant and equipment, were valued at A$3.6 million. No external valuation was conducted for the acquisition.

The aim of the deal is to solidify Australia’s sovereign shipbuilding capability by consolidating design, construction and operational expertise under a single, locally owned entity, in a bid to enhance national resilience and support long-term defence industry growth, said the Australian shipbuilder.

Luerssen Australia is a subsidiary of NVL, which is an independent, privately owned group of German shipyards and related companies.

It specialises in the design, manufacture and servicing of yachts, naval and coastguard vessels. The company supports Australia’s national sovereign shipbuilding strategy and operates from the Australian Marine Complex in Henderson, Western Australia.

The acquisition has a target completion date of Jul 1.

A pre-agreed level of working capital will be retained within Luerssen Australia upon completion to support post-completion operations as well, Civmec said.

Civmec signed a non-binding heads of agreement with the German shipbuilder for the transfer of ownership of Luerssen Australia last Oct 15.

This, in particular, was to ensure the “uninterrupted design and build” of six offshore patrol vessels for the Royal Australian Navy under an existing contract with the Australian Department of Defence – the NVL subsidiary’s sole business, executed at a shipyard in South Australia and a Civmec-owned facility in Western Australia.

Shares of Civmec closed 1.2 per cent or S$0.01 higher at S$0.86 on Wednesday.