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Bollinger Shipyards To Take On USCG’s New Polar Icebreaker Program With Acquisition Of VT Halter Marine

An artist illustration of the U.S. Coast Guard's Polar Security Cutter. Image courtesy VT Halter Marine

Bollinger Shipyards To Take On USCG’s New Polar Icebreaker Program With Acquisition Of VT Halter Marine

Mike Schuler
Total Views: 10077
November 7, 2022

The transaction includes key U.S. Government programs, including the USCG Polar Security Cutter, U.S. Navy Auxiliary Personnel Lighters and a repair facility.

Lockport, Louisiana-based Bollinger Shipyards, one of the largest privately-owned shipbuilders in the U.S., will acquire VT Halter Marine, Inc. and ST Engineering Halter Marine Offshore from parent company ST Engineering North America, taking on major government shipbuilding programs in the process.

The acquisition expands Bollinger’s new construction and repair capabilities for government and commercial customers. All ongoing programs will be conveyed with the transaction, notably, the Polar Security Cutter (PSC) program for the U.S. Coast Guard, which could include up to three vessels valued at $1.9 billion, and the Auxiliary Personnel Lighter-Small (APL(S)) program for the U.S. Navy.

Singapore-based ST Engineering disclosed the cash value of the sale at $15 million on a cash-free, debt-free basis, subject to possible net working capital adjustments post-closing. The company may receive earnout payments post-closing of up to an aggregate amount of $10.25 million, subject to the award of certain future shipbuilding contracts. The company said the two businesses have posted a combined net loss before tax of $256 million in the last five years (2017-2021), with an annual net loss before tax ranging from about $$40 million to $60 million.

The transaction is expected to close by the end of the year.

Also Read: US Shipyards – Record Revenue But Firesale Valuations

The acquisition includes 378 acres comprising 2 shipyards in Pascagoula, Mississippi and two dormant yards north of Pascagoula. The newly acquired yards will be renamed Bollinger Mississippi Shipbuilding and Bollinger Mississippi Repair.

The Pascagoula facilities are located with direct, deep-water access to the Gulf of Mexico and corporate office space, engineering, fabrication, warehousing and a foreign trade zone. The shipyard consists of 225,000 square feet of covered production area in the main fabrication assembly buildings, and is capable of producing Panamax-sized vessels up to 50,000 DWT and features an expanded 225.6m (740ft) tilt-beam launch system.

“For over 75 years, my family has been dedicated to providing our government and commercial customers with the highest levels of quality, support and service in the U.S. shipbuilding industry,” said Ben Bordelon, CEO and President of Bollinger Shipyards. “The addition of VT Halter Marine and STEHMO in Pascagoula, Mississippi is strategic as it further strengthens our position in the industry and U.S. defense industrial base by allowing Bollinger to expand our footprint, capabilities and suite of innovative solutions that we can provide to our customers. From Day One, the Bollinger team will leverage our proven and best-in-class management team, operational excellence and existing capability to ongoing commercial and government programs, especially the Polar Security Cutter program.”

Related book: Heavy Metal: The Hard Days and Nights of the Shipyard Workers Who Build America’s Supercarriers by Michael Fabey

VT Halter Marine was awarded the Polar Security Cutter program contract in 2019, beating out Bollinger Shipyards and Fincantieri Marinette Marine to win the bid. The initial award was valued at $745.9 million with options that could bring the value to $1.9 billion if all three vessels are built. Construction of the lead PSC is scheduled to begin in 2022 with delivery planned for 2025. In late 2021, the Coast Guard and U.S. Navy exercised their option to construct the second vessel.

For ST Engineering, the sale marks its exit from the U.S. maritime sector.

“We have experienced challenges and losses in the past years operating the two U.S. shipbuilding and ship/rig repair businesses. After a thorough review of strategic alternatives, we made this difficult decision to exit the U.S. Marine business,” said Vincent Chong, Group President & CEO of ST Engineering. “We believe that this proposed transaction represents a favorable outcome for ST Engineering shareholders, Halter Marine and STEHMO as well as their stakeholders.”

Bollinger is a major shipbuilding contractor for the U.S. government. In addition to construction of the U.S. Coast Guard Sentinel-class Fast Response Cutter (FRC) program, Bollinger builds the Mine Countermeasures Unmanned Surface Vessel (MCM USV) and the Towing, Salvage and Rescue Ships (T-ATS) programs for the U.S. Navy, as well as the Regional Class Research Vessel for the National Science Foundation and Oregon State University.

Bollinger also has two active contracts with General Dynamics Electric Boat to build a 618 ft by 140 ft state-of-the-art Floating Dry Dock and a 496 ft by 95 ft Pontoon Launcher, both of which will support the construction and launching of the U.S. Navy’s Columbia Class Ballistic Missile Submarines. In addition, Bollinger is participating in industry studies for two government programs, including the U.S. Navy’s Large Unmanned Surface Vehicle (LUSV) program and the U.S. Navy’s Light Amphibious Warship (LAW) program.

“Bollinger takes great pride in being a major job creator in Louisiana,” added Bordelon. ‘Today, we’re excited to grow and expand that legacy to Mississippi’s Gulf Coast. We have always said that our greatest strength has and continues to be our people. By combining our skilled workforces, we’ll ensure coastal Mississippi remains synonymous with defense shipbuilding and remains a major part of our industrial base.”

Also Read: US Shipyards – Record Revenue But Firesale Valuations

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