Babcock seeks to take over Australian naval joint venture in £32m deal


Defense and aerospace giant Babcock International Group Plc has announced plans to buy its Australian naval joint venture for £32million.

The group, which operates the huge Devonport shipyards in Plymouth and Rosyth in Scotland, has entered into a sale and purchase agreement to acquire the remaining 50% of its Australian Naval Ship Management (NSM) joint venture from its long-term joint venture. term. partner in Australia.

The FTSE250 company expects to pay A$60m (about £32m), in an acquisition subject to customary approvals. The NSM joint venture was established in 2012 to service the Royal Australian Navy’s ANZAC-class frigates.

Today, the company has become a strategic maritime support partner in Australia, supporting not only the Anzac class under the naval vessel asset management agreement, but also two helicopter landing docks from Canberra class (LHD) and 12 LHD landing craft. NSM has approximately 300 employees.

The acquisition will allow Babcock Australasia, one of the group’s focus nations, to further enhance the scope of its support to the Australian Defense Force’s maritime capability and provide additional capability for the current and future maritime programs of the group. ‘Australia.

Australian Naval Ship Management grew in the year to the end of March 2021 and reported revenue of A$254m (around £134m), with Babcock entitled to a share of capital of 50%.

David Lockwood, Babcock’s Managing Director, said: “We are very proud of the success of NSM since its inception almost a decade ago. We look forward to continuing to provide innovative and highly skilled support to the Australian Defense Force as we further develop our presence in this important market.”

Babcock has just completed the sale of its stake in aviation services company AirTanker Holdings Ltd for £95m. The gourp sold its 15.4% stake to global investor and fund manager Equitix Investment Management Ltd.

The deal brought in a total of £126 million, but Babcock had to repay £31.1 million in shareholder loans, which were included in the company’s net debt.

The sale was part of Babcock’s ongoing targeted divestment program – a turnaround plan aimed at streamlining the group and dealing with losses incurred during the Covid pandemic.

This was the fourth sale completed, and the £95m raised brings the gross proceeds raised to date to £448m, exceeding the minimum of £400m the group aimed to raise in various sales.

Business Live’s South West business reporter is William Telford. William has over a decade of experience reporting on the business scene in Plymouth and the South West. It is based in Plymouth but covers the whole region.

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In December 2021, Babcock sold its electricity division to infrastructure services provider M Group Services for £50m as part of the rationalization plan. He had previously sold the Frazer-Nash Consultancy marine division business to KBR, an American engineering giant, for £293 million.

Meanwhile, the UK’s competition watchdog has probed Babcock’s £10million sale of its oil and gas aviation business. The Competition and Markets Authority (CMA) is assessing whether the deal, which would see helicopter services specialist CHC Group LLC acquire a company that flies crew to offshore oil rigs by helicopter, could lead to a substantial lessening of competition in the UK.

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