Korea’s Hanwha Ocean and Hanwha Systems have agreed to buy Philly Shipyard for $100m.
The companies have entered into a share purchase agreement with Oslo-listed Philly Shipyard ASA, for the purchase of Philadelphia-based Philly Shipyard Inc, the sole operating subsidiary of Philly Shipyard ASA.
“We look forward to leveraging our shipbuilding and manufacturing know-how in continuing the success of Philly Shipyard as it meets the expanding needs of the U.S. for decades to come,” Hyek-woong Kwon, chief executive of Hanwha Ocean, said in a statement on Friday.
Hanwha Systems and Hanwha Ocean see this acquisition as part of a long term investment strategy to expand their global defense and shipbuilding activities and to bring best practices and leading technologies to complement existing Philly Shipyard capabilities, the companies said.
Kjell Inge Rokke-backed Philly Shipyard will sell all of its business for $100m in cash, corresponding to a value per share of NOK 87.24 ($8.28), according to a statement on Thursday.
Philly shares traded around NOK 67 in Oslo on Friday.
“After two decades of stewardship, it is with great honour that we transition the ownership from Aker to Hanwha. Recognised as a global leader, Hanwha brings a wealth of sophisticated shipbuilding experience that will enable Philly Shipyard to realise a grander vision for its employees and customers,” Philly Shipyard ASA chairman Kristian Rokke said.
Philly Shipyard Inc is a US shipbuilder that is pursuing a mix of commercial and government work, having delivered around 50% of all large oceangoing Jones Act commercial ships since 2000.
“Reflecting on the past 17 years, I am personally grateful for the opportunity to have worked side by side with the people of Philly Shipyard and eagerly anticipate witnessing the shipyard’s continued growth and success in the future. From a financial perspective, the combination of $150m in dividends since 2014 and sales price of $100m, offers shareholders an attractive value creation journey,” Rokke said.
Subject to the satisfaction of all closing conditions, the parties expect that the transaction will close during the fourth quarter.
Philly Shipyard’s board of directors have obtained a fairness opinion from Arctic Securities, concluding that the transaction, from a financial perspective, is fair.
On this basis, the board of directors approved the transaction.
The board will work on defining the company’s future strategy and structure following the completion of the transaction, including alternatives for the use of proceeds.
Advokatfirmaet BAHR and Faegre Drinker Biddle & Reath LLP are acting as legal advisers to Philly Shipyard.
